Share market rallies on back of higher commodity, oil prices

There were strong gains for the share market and the dollar on Tuesday, as investors cheered higher commodity prices and a bounce for oil.

The All Ordinaries index rose by 50 points to close at 5,255, while the ASX 200 index finished 1 per cent higher at 5,189.

Energy shares fared the best, after oil prices recovered heavy losses after weekend talks between oil producing nations failed to reach a deal to curb supplies.

Worley Parsons led the way, up 6.8 per cent to $6.26.

Papua New Guinea-focused oil and gas producer, Oil Search, finished 5 per cent higher at $6.53.

Today it said production had risen to a record level at the start of the year, but revenue had fallen due to lower oil and gas prices.

Miners were also in demand after iron ore prices jumped by more than 3.5 per cent.

Fortescue Metals climbed 6.8 per cent to $3.32, while Rio Tinto rose by 3.9 per cent to $49.29.

Rio has cut its iron ore production forecast for next year after delays to its train system.

The mining giant said iron ore output was up 13 per cent in the first few months of this year, compared with the same time last year.

In the banking sector, all four big banks rose, with NAB faring the best, up 2.5 per cent to $27.20.

But Qantas bucked the day's trend, falling another 4.1 per cent to $3.47 after yesterday cutting plans to add more flights.

The Australian dollar rallied to a 10-month high overnight on higher oil prices and continued to rise through the day.

Just before 5:30pm (AEST), it was buying 78 US cents, 68.8 euro cents, 84.8 Japanese yen and 54.4 British pence.

At the same time, oil prices were higher with Brent crude fetching $US43.41 a barrel.

Spot gold was steady at $US12,043 an ounce.

Source: ABC News

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