Wednesday, 12 September 2012 11:32
SYDNEY: Australian stocks rose 0.8 percent, with banks leading gains as investors remain hopeful a German court will make a decision that prevents the euro zone sovereign debt crisis from spreading.
The benchmark S&P/ASX 200 index climbed 32.6 points to 4,358.4 as of 0253 GMT.
Later on Wednesday, Germany's Constitutional Court is expected to approve the European Stability Mechanism - the euro zone's new bailout fund - but legal experts believe it will impose tough conditions limiting German flexibility on future rescues.
A favourable court decision would show European sovereign debt and banking issues "are being addressed in a more robust form and obviously would be positive for banks there and banks here," said Peter Warnes, head of equities at Morningstar, adding that it will signal "the market is freeing up a bit."
Shares in the banking sector all rose with the Commonwealth Bank of Australia posting the biggest gain, 1.5 percent to A$54.98.