Australia stocks traded solidly higher early Monday, with the S&P/ASX 200 up 0.8% as financials and airlines rallied. The heavily weighted bank shares offered strong support for the market after Sunday's release of a long-awaited government report, from a panel led by former Commonwealth Bank of Australia chief David Murray, indicating that the big lenders may need more capital but containing little in the way of bad surprises. In the wake of the report, Commonwealth Bank rose 0.8%, National Australia Bank Ltd. added 1.6%, Australia & New Zealand Banking Group advanced 1.3%, and Westpac Banking Corp. gained 1.4%. Meanwhile, shares of Qantas Airways Ltd. shot 8% higher after the carrier said that the sharp drop in oil prices and its own cost-cutting measures would secure a July-December pretax profit, after having posted a sizeable loss in the year-earlier period. Qantas rival Virgin Australia Holdings Ltd. also followed higher with a 2.4% gain. Among other movers, U.S.-exposed construction-materials company James Hardie Industries SE rose 2.9%, while contractor Leighton Holdings Ltd. also added 2.9%, and retail major Wesfarmers Ltd. improved by 1.9%. But mining shares were mostly weaker after gains for the U.S. dollar on better-than-expected employment data out Friday hit the commodity markets. BHP Billiton Ltd. lost 0.7%, though Rio Tinto Ltd. managed a 0.4% advance, while among the iron-ore plays, Fortescue Metals Group Ltd. lost 1.1%, Arrium Ltd. fell 1.6%, and Atlas Iron Ltd. was down 3.3%. The stocks were not helped by RBC Capital Markets cutting its price targets for shares of some of the iron-ore names, according to Dow Jones Newswires.
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