Market rallies after US strikes debt ceiling deal

However, local traders said the rally could be short-lived because of ongoing debt concerns in Europe. The benchmark S&P/ASX200 index rose 81.6points, or 1.83per cent, to 4549.7, while the broader All Ordinaries index was up 79points, or 1.74per cent, at 4618.4.

Burrell Stockbroking adviser Jamie Elgar said the passage of legislation increasing the US' debt-ceiling bolstered the market. The legislative fix eased fears of a possible US default on its sovereign debt.

"The US is really focusing on that rather than the corporate earnings that have been coming out [in the US] that have been pretty good, and they were pretty good last night again on IBM and Apple," he said.

All sectors of the local market rose yesterday. Among banking stocks ANZ was up 43? at $21.20, National Australia Bank rose by 62? to $24.29, Westpac gained 48? cents to $21.16, and Commonwealth added $1 to $49.55.

News Corp was the best performer in the top 100 stocks, up 74?, or 5.1per cent, at $15.24, while its non-voting stock was up 67?, or 4.8per cent, at $14.75.

News chief executive Rupert Murdoch has said he would not resign because of the phone hacking scandal in Britain.

Building products suppliers James Hardie and Boral were good performers, after US data showed an increase in home building. James Hardie rose 10? to $5.80 and Boral was up 17?, or 4.18per cent, at $4.24.

In the resources sector, BHP Billiton was up 82?, or 1.92per cent, at $43.44 while Rio Tinto gained $1.22, or 1.5per cent, to $82.55.

BHP said it had achieved production records in four commodities in 2010/11, with production of iron ore posting its 11th consecutive record.

Retailer Woolworths reported a 4.7per cent lift in annual sales to $54.1 billion despite a challenging year characterised by falling prices. Its shares were up 20? at $27.45.

Other retail stocks also were higher. Wesfarmers was up 88? at $31.09, David Jones rose 3? to $3.16, Myer gained 7? to $2.44 and JB Hi-Fi was 31? higher at $15.36. Telstra shares were up 2?, at $3.06.

Preliminary national turnover was 2.53 billion shares worth $5.17 billion, with 771 stocks up, 318 down and 333 unchanged.