By Robb M. Stewart 
 

MELBOURNE--A rally in Australian mining stocks on the back of a slump in the U.S. dollar helped drive the local equities market higher on Monday.

The U.S. dollar remained depressed following significantly weaker-than-expected U.S. jobs data on Friday, which in turn buoyed prices for iron ore, copper and other commodities. It also lifted Australia's currency.

Many analysts consider an increase in short-term interest rates at the U.S. Federal Reserve's June 14-15 meeting now off the table after nonfarm payrolls rose by 38,000 in May, the weakest performance since September 2010.

Iron-ore prices jumped 3.3% on Friday to $49.50 a metric ton, while copper led gains in base metals in Asia trading Monday. Oil prices also rose slightly in Asia trade, with the Brent crude benchmark briefly topping $50 a barrel, after prices slipped Friday on signs U.S. drilling activity had picked up.

Rising for a second session running, the S&P/ASX 200 ended the day up 41.5 points, or 0.8%, at 5360.4.

The materials sector jumped 3.8%, the basket of energy shares was up 0.6% and the heavily weighted financials sector rose 0.3%.

Among the miners, BHP Billiton and Rio Tinto gained 3.7% and 3.9%, respectively, and fellow iron-ore producer Fortescue Metals Group gained 4.2%. Gold miner Newcrest Mining jumped 12% after the precious metal traded near a two-week high.

Woodside Petroleum and Santos both rose 0.7% and Origin Energy advanced 2.7%, although Papua New Guinea-focused Oil Search slipped 0.3%.

Commonwealth Bank of Australia and Westpac led the major banks, rising 1.1% and 1%, respectively, while National Australia Bank added 0.5% but Australia & New Zealand Banking Group lost 0.5%.

Insurers were under some pressure after a storm struck Australia's east coast over the weekend. QBE Insurance fell 1.6%, Insurance Australia Group dropped 2.2% and Suncorp declined by 1.7%.

 

Write to Robb M. Stewart at robb.stewart@wsj.com

 

(END) Dow Jones Newswires

June 06, 2016 03:30 ET (07:30 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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