Stocks climb to highest in five months

Investors were also buoyed by a reasonably positive production report from global miner BHP Billiton.

The S&P/ASX 200 Index rose 59.9 points, or 1.4 per cent, to 4348.7, its best close since October 28.

Global sharemarkets rallied in response to the Spanish short-term bond auction, which eased concerns over the eurozone debt crisis. Spanish yields are the hot topic in the market at the moment, with daily investment flows either towards or away from riskier assets hinging on the price direction of the embattled country's bonds.

The overnight auction of short-term bonds was a curtain raiser to a crucial auction of 10-year bonds later this week, seen as a key indicator of the market's confidence in Spain.

CMC Markets chief market analyst Ric Spooner said the Australian market responded positively to the auction, but noted that short-term bonds were less risky than the long-term bonds

up for sale later this week.

"But so far, so good," Mr Spooner said. "A generally

in-line and reasonable result from BHP Billiton gave us some support today as well, all against the background of a presumption of an interest rate cut by the Reserve Bank next month."

In the resource sector, BHP Billiton rose 95?, or

2.9 per cent, to $35.10 after its latest production figures met expectations. But the miner warned that the impact of ongoing strikes at its Queensland coal mines might be substantial.

Rio Tinto jumped $1.80, or 2.8 per cent, to $66.50 while Fortescue rose 14?, or 2.4 per cent, to $5.93 ahead of its production report today.

Oil and gas producer Petsec Energy was steady

at 18.5? as it booked a 62 per cent plunge in March-quarter revenue after falls in production and US gas prices.

Westfield Group gained 30? to $9.17 after it said it would sell eight shopping centres in the US for

$US1.15 billion so it could reduce debt and invest in developments such as the new World Trade Centre.

Bank of Queensland was 18? higher at $7.14 after it said loan arrears were stabilising. A big rise in the cost of bad loans caused a $90.6 million first-half loss for BOQ.

NAB rose 33? (1.5 per cent) to $25.18, Westpac advanced 8? to $22.06,

ANZ picked up 26? (1.1 per cent) to $23.26 and Commonwealth put on 68? (1.4 per cent) to $50.78.

The dollar gained three-quarters of a US cent, closing at $US1.0385 from Tuesday's $US1.0314.