Cyprus deal clears air and our banks rise

The sharemarket closed higher on Monday, led by the big banks, as Cyprus struck a bailout deadline-day deal with the European Central Bank.

Cyprus had until Monday to agree to the ECB's conditions in order to receive the €10 billion ($12.49 billion) deal.

At the close, the benchmark S&P/ASX 200 Index was up 22.9 points, or 0.46 per cent, at 4990.2. The broader All Ordinaries Index was up 20.7 points, or 0.42 per cent, at 5001.5.

IG Markets chief strategist Chris Weston said most local investors were optimistic that a deal would go ahead.

He said gains by the four major banks had driven the Australian market higher as investors continued their chase for high-yielding stocks.

"It was just about the banks, really," he said.

"When you see all four big banks over 1 per cent [higher], considering their weight on our market now, it drives it up."

ANZ closed 28¢ higher at $28.83, National Australia Bank was up 22¢ at $30.85, Westpac surged 51¢ to $31.01 and Commonwealth Bank jumped 37¢ to $69.

Leighton jumped 87¢ to $21.07 after it appointed director Bob Humphris as chairman.

Outgoing chairman Stephen Johns stepped down and left the company on Friday, along with directors Wayne Osborn and Ian Macfarlane, a former Reserve Bank governor, after a breakdown in relations with Leighton's major shareholder, Hochtief.

Westfield Group securities gained 18¢ to $10.94 after it said it would sell a 49.9 per cent stake in its six Florida shopping centres to O'Connor Capital Partners for $US700 million ($673.63 million).

Shares in toy distributor Funtastic closed flat at 23.5¢ after it announced a 68 per cent jump in first-half profit.

The dollar was higher after the Cyprus bailout deal.

At 5pm on Monday, it was trading at US104.55¢, up from Friday's close of US104.26¢.

CMC Markets chief market strategist Michael McCarthy said there had been a lot of cross-trading during the afternoon as the euro strengthened against the Aussie.

"We have weakened against the euro and that's what it appears to be about," Mr McCarthy said. "It's not that the US dollar has weakened against the euro, it's that the euro has strengthened."