THE Australian sharemarket closed firmly in the black after gains in the financial sector countered weakness in retail stocks.
The benchmark S&P/ASX 200 index was up 30.3 points, or 0.64 per cent, at 4786.0 points, while the broader All Ordinaries index added 27.2 points, or 0.56 per cent, to 4888.1 points.
The Australian dollar was higher despite being briefly rocked by news that growth in producer prices in the fourth quarter was much more sluggish than expected, strengthening views the central bank will sit pat on interest rates at a policy meeting next week.
In late trade, the Australian dollar changed hands at US98.86 cents, up from US98.50c late Friday.
City Index Australia senior dealer Jian Wei said the local stockmarket gained momentum in the afternoon after a flat open.
Strong leads from overseas banks drove Australian banking stocks more than one per cent higher.
Westpac was up 25c, or 1.11 per cent, at $22.80, ANZ was 33c, or 1.41 per cent, higher at $23.66, Commonwealth Bank appreciated 66c, or 1.28 per cent, to $52.32 and National Australia Bank was up 28c, or 1.15 per cent, at $24.61.
"We also saw investors picking up stocks in the materials sector, including Fortescue Metals, which has recovered some of its losses from last week," Mr Wei said.
Fortescue shares were up 11c, or 1.69 per cent, at $6.60, while BHP Billiton was 21c firmer at $44.92 and Rio Tinto put on 73c to $85.11.
