Stocks extend winning run

The local market has clocked up its eighth straight session of gains, hitting a new 11-month peak.

The Australian sharemarket has extended on its best winning run for the year, gaining for an eighth straight session on Monday.

At the closing bell, the benchmark S&P/ASX 200 index lifted 28.9 points, or 0.53 per cent, to 5,458.5, while the broader All Ordinaries index added 28.8 points, or 0.52 per cent, to 5,538.9.

The session saw the benchmark strike a new 11-month peak, with interest in the energy and retail sectors stirring strong buying demand.

The materials subsector was the only one to record red numbers, driven down by weaker base metal prices over the weekend.

Questions have been raised about the durability of the rally given it is the longest since a nine-day run in December, with Shaw & Partners head of research Martin Crabb noting earnings per share upgrades were needed to justify current trading levels.

“The market remains unconvinced about the outlook for economic growth, so the rally is based on declining risk premia more than anything else,” he wrote in a note.

Mr Crabb said the recent gains represented a “low quality” rally driven by stocks that have lagged this year.

That could be a reference to the major banks, which have been among the worst performing big names on the market this year.

Last week the big four all gained upwards of 5 per cent, with the positive run continuing on Monday.

ANZ climbed 0.44 per cent to $24.96, Commonwealth Bank lifted 0.21 per cent to $76.10, NAB tacked on 0.12 per cent to $25.94 and Westpac rose 0.63 per cent to $30.30.

Bigger gains were seen in the retail space as JB Hi-Fi surged 2.7 per cent to $24.25, Woolworths leapt 2 per cent to $21.95 and Wesfarmers advanced 0.56 per cent to $41.13.

Similar strength was seen in the energy space after crude prices rose on Friday night. Sentiment was also boosted by M&A activity with Exxon trumping Oil Search’s bid for InterOil and analysts largely welcoming Woodside’s Senegal foray last week.

The latter gained 0.64 per cent to $26.85, although it was outpaced by Santos’ 1.7 per cent lift to $4.85 and Oil Search’s 3.9 per cent jump to $7.25.

Investors appeared to welcome the rival bid for InterOil, showing little concern about the prospect of a bidding war given Oil Search is seen likely to be a winner if it concedes the race to Exxon.

The big miners struggled, with BHP Billiton sliding 0.74 per cent to $20.22 and Rio Tinto easing 0.81 per cent to $50.14.

Iron ore miner Fortescue slumped 2.6 per cent to $4.12 as ore prices weakened.

Meanwhile, Telstra edged up 0.52 per cent to $5.78, while Qantas lifted 0.65 per cent to $3.09.

The Australian dollar ended the local session at US75.85c after a quiet day of trade.