Westpac leads with a break-out

The sharemarket closed more than 1 per cent higher yesterday, led by the banking and finance sector and following solid gains on Wall Street.

Westpac's break-out was its biggest move in almost 12 years and boosted its rivals, while a buoyant resources sector also fuelled market confidence.

"The Dow was better again overnight and that certainly helped," Intersuisse director of equities Andrew Sekely said.

"I don't think Westpac's result did the market any harm, because that has spread over to other banks and it in no way accounts for the fact that Babcock & Brown and Macquarie Bank also went up very strongly.

The ASX 200 climbed 57.4 points to 4513.7 while the All Ordinaries firmed 52.1 to 4460.9.

Westpac shares surged by as much as $1.16, or 5.6 per cent, to a record high of $21.67 - the biggest percentage gain in the stock since December 1993 - before closing 64c higher at $21.15 as investors rushed to join the bank's $700 million buyback, announced after the market closed on Wednesday.

The other big banks also enjoyed a healthy session, with NAB gaining 39c to $33.32 and Commonwealth up 50c to $39.83. But ANZ dipped 1c to $23.38.

Macquarie Bank jumped 70c to $66.20 and Suncorp Metway rose 35c to 19.30.

Shares in Rio Tinto surged $1.28 to $58.39 and BHP Billiton gained 58c to $21.28. Woodside rallied 91c to $32.91 while Santos rose 15c to $11.30.

PBL jumped 47c to $16.51 after news that the Tasmanian Government has agreed to license the British online betting agency Betfair, which means the 50-50 joint venture between Betfair and PBL can go ahead.

Retailers also found strength, with Woolworths up 10c to $16.40, Coles Myer up 25c to $10.14, Harvey Norman up 7c to $2.80 and David Jones also up 7c to $2.34.

Qantas climbed 7c to $3.50 with chairman Margaret Jackson unleashing a verbal attack on rival Emirates. Low-cost carrier Virgin Blue lost 0.5c to $1.49.

Leighton Holdings recovered to close 9c stronger at $15 after the stock slid on Wednesday into the hole left by a structural collapse in the Lane Cove Tunnel it is building.

Macquarie Airports rose 4c to $3.03 after telling the market of its decision to pull out of a tender for Budapest Airport.

The gold sector was also up, with Newcrest Mining up 40c to $19.40 and Newmont 9c firmer at $5.82.

Lihir Gold jumped 5.5c to $1.81 after resuming full gold production at its mine in Papua New Guinea after a massive landslide interrupted operations last month.