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Australia stocks hit 2-mth peaks on U.S. bank plan
Tuesday March 24, 01:08 PM
(Adds analyst comment, stocks on the move)
WELLINGTON, March 24 (Reuters) - Australian shares gained 2 percent on Tuesday, hitting its highest levels in two months, lifted by financial stocks on hopes a U.S. plan to absorb $1 trillion of banks' toxic assets would help revive lending.
Mining stocks also gained as a strong rally on Wall Street spurred metal and oil prices higher.
The benchmark S&P/ASX 200 index .AXJO gained 69.7 points to 3,620.9 by 0000 GMT, after earlier gaining as much as 2.6 percent to its best intra-day level since mid January.
The index rose 2.3 percent on Monday to its highest close in five weeks.
New Zealand's NZX-50 index .NZ50 jumped 3 percent to 2,668.8.
"Markets have enjoyed the Geithner package, and it should prove solid momentum in the short term," said Lucinda Chan, division director at Macquarie Equities.
The U.S. Treasury said it would offer incentives for private investors to help rid banks of of a mountain of bad debts, [nSP429491], sending the Dow Jones industrial average up 6.8 percent.
Top mining firm BHP Billiton (ASX: BHP.ax) gained 2 percent while rival Rio Tinto (ASX: RIO.ax) rose 4.5 percent.
The top four banks all gained, with Commonwealth Bank of Australia (ASX: CBA.ax) rising 3.9 percent, after U.S. banks posted huge gains on the rescue package.
STOCKS ON THE MOVE
* Debt-laden miner Oz Minerals Ltd OZL.AX fell more than 14 percent after the government extended its review into a $1.8 billion rescue bid by Chinese state-owned Minmetals. [nSYU006235]
2315 GMT ($1=1.42 Australian Dollar) (Reporting by Adrian Bathgate)
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