Market's one-month rise a two-year high

That was even after Monday's 1.2 per cent slump, and analysts say the volatility is likely to continue.

The 7.1 per cent gain in the All Ordinaries in October was the largest rally since July 2009, when the market rose 7.6 per cent as it recovered after the worst of the financial crisis.

October's gain, in the wake of the euro zone's long-awaited debt deal, followed six straight months of falls for a total loss of 18.7 per cent.

The ASX was headed for its best month since 1988 until falls on the final day of the month left the benchmark S&P/ASX200 index down 55.2 points, or 1.27 per cent, at 4298.1.

October's positive performance continued the volatility of recent months, with Germany, France and the US all up between 4 and 6 per cent last week, Commsec market analyst Steve Daghlian said.

Now that the concrete measures had been announced by the European Union, investors were realising many problems still existed in global markets, which was why the market was down, Mr Daghlian said.

"I think the volatility could very well continue until things settle down a little bit offshore . . . there's just a little bit of pulling back, profit taking," he said.

"One meeting from European leaders does not mean everything is going to sort itself out."

Shares in Qantas were up 6.75?, or 4.4 per cent, to $1.6125, the biggest gainer among the top 100 stocks after Fair Work Australia ordered a halt to the industrial action and the airline's planes started flying again. Rival airline Virgin Blue rose 1.5?, or 4.2 per cent, to 37.5?.

Travel agent Flight Centre went down 9? to $19.88.

The big four banks were all weaker ahead of full-year results from ANZ and Westpac this week.

ANZ, the worst of the banks on Monday, dropped 40?, or 1.8 per cent, to $21.68, National Australia Bank was down 29? at $25.70, Commonwealth Bank lost 69? to $49.27 and Westpac shed 36? to $22.32.

Construction giant Leighton Holdings lost 56?, or 2.5 per cent, to $21.84 after it said a credit rating downgrade by Moody's would have no impact on its existing credit facilities.

Rare earths supplier Lynas Corporation slumped 9.5?, or 7.3 per cent, to $1.205, the worst performance among the top 100, after it said slight delays meant that a planned Malaysian plant would now come on line during the first half of 2012.