Australian stocks are surging with banks near record highs

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The Australian market surged higher, continuing the investor joy at lower interest rates and on the back of higher oil prices.

Among the banks, the Commonwealth strengthened by more than 1% in early trade to hit a record high of $91.345.

Its fellow members of the big four banks approached their own highs with the ANZ up 1.55% to $34.64, Westpac up 1.39% to $35.75 and NAB almost 1% to $36.58.

BHP was up 4.26% to $31.96, Rio Tinto 2.4% to $60, Fortescue Metals up 4.6% to $2.48.

The energy sector was leading the market, up 2.7% across the board. Woodside Petroleum was up 2.4% to $36.54 and Santos firmer by 3.65% to $8.51.

Oil prices rallied higher in overnight trade. Brent crude was up 4.4% to above $US57 a barrel while West Texas Intermediate prices are higher by more than 5% to around $US52.50 a barrel.

The ASX closed 1.46% higher yesterday after the Reserve Bank cut interest rates to 2.25% from 2.5% on concerns about economic growth and the strength of the Australian dollar.

Wall Street also befitted from higher oil prices with the The S&P 500 index closing up 1.4% overnight.

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