Two of the biggest miners on the ASX had whopping gains as investors lapped up China's decision to ease lending rules and ramp up economic activity.
BHP and Fortescue rose by more than three per cent and helped the market higher as investors responded to the People's Bank of China decision late last week.
Shaw and Partners chief investment officer Martin Crabb said China had for months been trying to lower commodity prices, but the latest decision suggested a change of direction.
"China is saying to its banking sector - we're giving you the green light to lend more money to drive economic activity," he said.
"And any positive for growth in China is positive for commodity stocks and producers."
Australia's miners make much of their money from selling commodities such as copper and iron ore, the latter used to make steel, to China.
IG Markets analyst Kyle Rodda also noted the significance of the central bank ploy.
He said it was a big change to economic policy and sweetened the growth prospects of some ASX stocks.
The mining gains, and a good lead from Wall Street, helped the benchmark S&P/ASX200 index close up 60.2 points, or 0.83 per cent, to 7333.5.
The All Ordinaries closed higher by 59.6 points, or 0.79 per cent, to 7604.9.
In the US this week, investors are focusing on company earnings, starting with major banks.
They will be particularly interested in forecasts about the second half of 2021 as some worry the recent economic surge is waning.
Meanwhile in Australia, the federal government will soon give more financial support for businesses affected by the coronavirus lockdown in Sydney and surrounds.
The lockdown is in its third week and there were 112 infections reported on Monday.
On the ASX, one of the main stories was Wesfarmers' $687 million offer for Australian Pharmaceutical Industries.
Wesfarmers boss Rob Scott said buying the Priceline Pharmacy owner would form the basis of a new healthcare division.
The suitor, which owns the Bunnings and OfficeWorks stores, offered $1.38 for each share it does not own.
API shares were higher by 19.65 per cent to $1.37.
Wesfarmers shares were up 0.5 per cent to $58.29.
While materials shares had the spotlight, property shares were next best and were higher by 1.23 per cent.
Goodman Group rose 2.16 per cent to $21.80.
Information technology and healthcare shares were better by 0.78 per cent and 0.75 per cent respectively.
Market giant CSL rose 1.3 per cent to $279.06.
The big four banks all closed higher by less than one per cent.
Mining services provider NRW Holdings jumped 11.97 per cent to $1.73 after selling mining equipment for $81 million.
Boggabri Coal Operations is buying the equipment from NRW subsidiary Golding Contractors.
NRW will use most of the money to reduce debt.
Stockbroker and investment adviser Bell Financial Group said first-half earnings were likely to be higher by three per cent on the previous corresponding period.
Investing in technology offset better sales and resulted in a profit before tax of $24 million.
Shares were down 6.5 per cent to $1.65.
The Australian dollar was buying 74.69 US cents at 1728 AEST, higher from 74.25 US cents at Friday's close.
ON THE ASX
* The benchmark S&P/ASX200 index closed up 60.2 points, or 0.83 per cent, to 7333.5 on Monday.
* The All Ordinaries closed higher by 59.6 points, or 0.79 per cent, to 7604.9.
* At 1728 AEST, the SPI200 futures index was down by 13 points, or 0.18 per cent, to 7239.
One Australian dollar buys:
* 74.69 US cents, from 74.25 cents on Friday
* 82.30 Japanese yen, from 81.80 yen
* 62.93 Euro cents, from 62.81 cents
* 53.80 British pence, from 53.97 pence
* 107.10 NZ cents, from 107.01 cents.