Stocks surge on gold miners

Heavy resources buying has pushed the bourse higher, as Newcrest surged 11pc and major miners also spiked.

The Australian sharemarket enjoyed a second day of gains on Monday, surging into the close on heavy buying of resources stocks.

At the closing bell, the benchmark S&P/ASX 200 index had jumped 41.50 points, or 0.78 per cent, to 5,360.4, while the broader All Ordinaries index rose 38.5 points, or 0.71 per cent, to 5,431.

“With the ASX 200 index having underperformed US markets last week, today followed Friday with another day of catch up,” CMC Markets chief market analyst Ric Spooner said.

The strong session followed the release of surprisingly soft jobs numbers in the US on Friday night, with the development slashing the chances of a June rate hike from the US Federal Reserve.

The prospect of cheaper money for longer aided risk assets, such as commodities, with base and precious metals moving sharply higher and Australian mining stocks following suit.

The biggest winners were gold stocks, which skyrocketed over 10 per cent at the close.

The sector’s biggest player Newcrest went with the crowd in jumping 11.64 per cent to $22.06, while smaller rival Regis Resources bounded 13.5 per cent to $3.35.

The buying pressure extended to the big miners as BHP Billiton surged 3.72 per cent to $19.22 and Rio Tinto leapt 3.86 per cent to $45.22, while iron ore heavyweight Fortescue added 4.22 per cent to $3.21.

Gains in the energy space were more subdued after crude prices slid at the tail-end of last week.

Origin rose 2.70 per cent to $5.71, Santos lifted 0.68 per cent to $4.44 and Woodside climbed 0.71 per cent to $27.05.

In banking, ANZ inched down 0.52 per cent to $24.96, Commonwealth Bank edged up 1.12 per cent to $76.60, NAB advanced 0.53 per cent to $26.62 and Westpac rose 1per cent to $30.26.

The big four have been aided by a low interest rate outlook as investors covet their high dividends.

Among blue chips, Telstra eased 0.18 per cent to $5.58, while Qantas closed flat at to $2.92.

Elsewhere, QBE slid 1.61 per cent to $12.21 as the insurance sector was hit by concerns about damages stemming from the east coast storm over the weekend, while Insurance Australia Group dropped 2.2 per cent to $5.72 and Suncorp declined by 1.72 per cent.

Engineering firm UGL endured its roughest day on record, plunging 33 per cent to $2.30 after reporting further delays at the Ichthys project.

The fall was the group’s heaviest since joining the ASX in 1994.

Ahead in global markets, all eyes will be on Federal Reserve Chair Janet Yellen as she speaks overnight on the topic of ‘The Economy and Monetary Policy.” Ms Yellen could spark fresh market volatility if she backs away from a near-term interest rate increase.

Meanwhile, a policy meeting at the Reserve Bank of Australia on Tuesday is not expected to result in a cut in interest rates, with futures market pricing implying an 8 per cent chance of an easing.