SYDNEY: Australian shares advanced 1.3 percent on Monday, boosted by resource stocks on firmer metals prices and Wall Street's strong close on optimism about Europe after a euro zone summit that agreed on closer fiscal ties.
Origin Energy shares climbed 3 percent after its joint venture partner Sinopec agreed to increase its stake in the Australia Pacific LNG project to 25 percent.
Other energy stocks benefited from Origin's gains, including Santos up 3.2 percent and Woodside Petroleum up 1.7 percent.
The big miners led the broader market higher, with BHP Billiton rising 2.5 percent to A$36.74 and rival Rio Tinto up 1.4 percent ot A$64.65.
"It is what we have seen over last few months, when the risk-on trade comes back the banks and miners do pretty well," said Jamie Elgar, dealer at Burrell & Co.
But he cautioned even after the euro zone agreement by most European Union leaders to build closer fiscal ties, there were still many unresolved issues on the debt front that could push European bond yields higher again and stock markets lower.
"There is a lot of room for disappointment on that front," for financial markets, Elgar said.
The benchmark S&P/ASX 200 index gained 56.2 points to 4,259.2 at 0015 GMT. The index dropped 1.8 percent on Friday to a two-week low.
New Zealand's benchmark NZX 50 index gained 0.2 percent to 3,279.
STOCKS ON THE MOVE
Shares in Aston Resources jumped as much as 5 percent after it agreed to merge with Whitehaven Coal to create a A$5.1 billion coal miner.
Aston shares last traded up 2.7 percent to A$10.02, just below the merger valuation, while Whitehaven was up 0.7 percent.
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Qantas Airways shares underperformed the market, rising 0.3 percent, after the airline tried to reassure investors that domestic bookings have recovered back to normal levels after months of industrial disputes and said it was still talking about setting up a premium airline in Southeast Asia.
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