Australian shares rally after US averts govt shutdown

The Australian share market has posted its best performance in four months, renewing hopes that its sharp two-day losing streak only postponed a potential Santa rally rather than cancelled it altogether.

The benchmark S&P/ASX200 index on Monday rose 134.6 points, or 1.67 per cent, to 8,201.6, recouping more than half of its losses over the previous two sessions with its strongest gains since a 1.75 per cent rise on July 31.

The All Ordinaries on Monday rose 136 points, or 1.64 per cent, to 8,452.7.

The Australian dollar was buying 62.57 US cents, from 62.25 US cents at Friday's ASX close.