Miners and banks drive market gains

The share market has gained ground for a second straight session as confidence in China's economy strengthens, and a weaker US dollar benefits resources companies.

However its early gains of up to one per cent were tempered by the Reserve Bank's decision to again leave rates on hold, which has reduced expectations of a rate cut before February.

"Asian markets seem to be reacting positively to improved sentiment around China and less US dollar strength," IG market analyst Angus Nicholson said.

Recent manufacturing data out of China has eased fears of downturn in China, he said, while disappointing jobs data from the US last week has pushed back the expected timing of a US rate hike.

"This has seen a weakening in the US dollar, particularly benefiting commodities priced in US dollars," Mr Nicholson said.

These two factors drove strong gains in the resources sector, with BHP Billiton up 38 cents at $23.88, Rio Tinto up 71 cents at $50.52 and Fortescue Metals 11 cents higher at $1.975.

All four big banks rose, with National Australia Bank up 32 cents at $30.92, Westpac adding 26 cents to $30.36, Commonwealth rising 60 cents to $74.96 and ANZ closing nine cents higher at $27.48.

The healthcare and retail sectors were mixed, while Telstra shed three cents to $5.70.

Source: AAP

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