The Australian share market has gained more than 1 per cent to hit a nine-week closing high.
The All Ordinaries index closed up 1.1 per cent, to hit a two-month high of 4,857.
It is close to the level seen in late September last year, just after Lehman Brothers' collapse.
The ASX 200 also gained 54 points to reach 4,845.
But the volume of trades was low, with most traders still on Christmas vacation.
Takeover rejection
Nufarm's management was not on holiday though - the company rejected a takeover bid from Sinochem.
Nufarm makes agricultural chemicals such as pesticides and herbicides, and the Chinese chemical company Sinochem had last week lowered its takeover offer from $13 to $12 a share.
Nufarm's management thought that was too low, so they negotiated a deal with the Japanese chemical maker Sumitomo.
It is proposing to buy 20 per cent of Nufarm's shares at $14 each, and Nufarm also intends to raise $250 million by selling new shares after the deal is completed.
Nufarm's shares closed just under 3 per cent higher at $10.86.
Christmas bonus
Investors are expecting the Christmas period to have been good for the big supermarkets, with Woolworths up almost 1 per cent, and Wesfarmers, which owns Coles, gaining 2.5 per cent.
But the major electronic retailers were lower - Harvey Norman was down 1.5 per cent, and JB Hi-Fi fell almost 2.5 per cent to close at $21.72.
BHP Billiton and Rio Tinto both rose more than 1 per cent after an overnight rise in metal prices on overseas markets.
The major banks were also generally higher by between 1 and 2 per cent, but Westpac remained steady.
Commodities and currencies
West Texas crude oil was fairly steady at $US78.64 a barrel at around 5:00pm (AEDT), and Tapis was higher at $US80.28.
Gold was fetching $US1,105.60 an ounce on the spot market.
The Australian dollar was steady and trading around yesterday's levels. At about 5:00pm it was worth: 88.81 US cents; 81.41 Japanese yen, 61.79 euro cents, 55.48 UK pence and $NZ1.254.
