Aust stocks close higher

Local market extends gains after upbeat trade data, business confidence.

The Australian stock market has closed sharply higher following a swing to surplus in the trade balance and a private survey showing business confidence hit a two and a half year high.

At the 1615 AEDT official market close, the benchmark S&P/ASX200 index increased 1.21% to 5,131.4 points, while the broader All Ordinaries index added 1.15% to 5,147.4 points.

Australian Bureau of Statistics data showed a December trade surplus of $468 million, seasonally adjusted, against expectations of a $200 million deficit.

Meanwhile, business confidence hit its highest level in over two and a half years in the December quarter, a National Australia Bank survey showed, although a lift in business conditions was not enough to pull the index out of negative territory.

IG market strategist Stan Shamu said equities enjoyed a bounce today as Asia posted solid gains in a move that seemed like "a relief rally after a long period of underperformance".

"While the United States trading session was somewhat lacklustre, there has certainly been plenty of action in Asian trade," Mr Shamu said.

"Australia has been among the leaders, rising significantly after having dropped around five per cent from its January highs.

"China’s week long break ends today and the market there will have a lot to catch up to when they return to trade tomorrow."

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