Australia stocks end at 4-month high

Australian stocks rose 1.2 per cent to a four-month closing high on Monday.

Australian stocks rose 1.2 per cent to a four-month closing high on Monday as miners got a boost from a buoyant Chinese economy and strengthened metal prices,and bank shares rallied as new capital rules were decided.

Rio Tinto rose 1.4 per cent to a four-and-a-half month closing high of A75.30 after copper gained on Chinese data showing factories ramped up production in August and the economy held strong.

BHP Billiton rose 1.6 per cent to A38.56.

8220;The market tends to follow the most convincing argument. Today it was the China story,8221; said David Taylor,market analyst at CMC Markets.

8220;Volumes weren8217;t up significantly today but the mood was. There are some important hurdles to get through 8230; but we8217;ve certainly kicked this week off on the right foot,8221; he said.

Also helping resource stocks was a report in The Australian newspaper that Australia8217;s new climate change minister,Greg Combet,believes the country8217;s coal sector has a future under government policies.

Australia8217;s benchmark Samp;P/ASX 200 index rose 54.6 points to 4614.9,according to the latest available data,its highest close since May 13.

New Zealand8217;s benchmark NZX 50 index rose 0.6 per cent to 3178.5.

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Top bank stocks rose,led by National Australia Bank which ended up 2.2 per cent at A25.22 after hitting a 6-week intraday high of A25.25.

Global regulators and central bankers agreed on Sunday to force banks to more than triple the amount of top quality capital they hold but gave lenders until 2015 to implement the first phase of the new rules.

8220;Australian banks have been preparing for the new rules by building up surplus capital. Today8217;s share move is a simple acknowledgement of their strong position,8221; said Simon Burge,executive director at Ati Funds Management,which owns Australian banks.

8220;They will not need to raise more capital. On the contrary,in a couple of years when rules are clearer,they may be placed to return capital to shareholders in some form,8221; he said.

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Contractor Leighton Holdings rose 2.9 per cent to A34.34 after replacing its chief executive.

Rare earths firm Arafura Resource rallied 11 per cent to A0.99 after it said it has successfully produced commercial quality separated rare earths and would be able to utilise the technology at its Nolans Project once production starts in late 2013.

Lynas Corp,another rare earths company,rallied 9.4 per cent to A1.34.

Biota Holdings surged 17 per cent to A1.045 after Japan8217;s Daiichi Sankyo received approval to manufacture and market its influenza antiviral treatment.

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Biota said it will receive a royalty on all sales in Japan and may also qualify for certain sale milestone payments.

Woodside Petroleum rose 1 per cent to A42.97 after US crude rose to a one-month high above 77.

Property firm Stockland ended up 0.75 per cent at A4.05. It raised its offer for local retirement village operator Aevum by 20 per cent to A320 million 297 million,and pitched it directly to Aevum8217;s shareholders after being rejected by Aevum8217;s board.

Aevum ended down 1.4 per cent at A1.735.