MELBOURNE: Australian shares rallied 2.4 percent on Wednesday as top miner BHP Billiton shot to a three-week high after an encouraging pickup in manufacturing in the United States and China boosted metal prices.
London copper and spot gold prices both rallied 2.5 percent, sending BHP stock up 4 percent to its highest since Dec. 12, and Rio Tinto up 3.2 percent.
Top banks also gained, led by a 1.8 percent rise for Westpac Banking Corp.
US manufacturing grew at its strongest in six months while construction spending surged to the highest in nearly 18 months.
That came after weekend data showed China, the world's largest consumer of metals, avoided economic contraction in December.
Manufacturing figures for Australia and the UK also improved, reassuring investors about the outlook for demand of raw materials.
"This synchronised improvement in global manufacturing data had a profound impact on commodity markets, with the entire base metals complex seeing strong buying interest," said Cameron Peacock, analyst at IG Markets.
Also boosting investors' mood was German unemployment, which declined more than forecast.
The benchmark S&P/ASX 200 index was up 98 points at 4,198.7 at 0045 GMT. It rose 1.1 percent on Tuesday.
New Zealand's benchmark NZX 50 index rose 0.2 percent to 3,279.9 points.
STOCKS ON THE MOVE:
Newcrest Mining rose 2.4 percent to A$31.42 after gold prices in New York and London rallied.
Insurance Australia Group, the country's top car and home insurer, underperformed with a rise of 0.8 percent to A$3.055 after it forecast total reinsurance expense of A$700 million ($726.57 million) to A$720 million for the 2012 financial year, up from A$620 million for the previous year.
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