The benchmark S&P/ASX 200 index rose 11.5 points to 4,911.1, reversing early losses after trading as low as 4,865.6. Last week the index declined 0.3 percent. Bank shares were boosted by Commonwealth Bank of Australia's late Friday profit upgrade and media speculation that Australia and New Zealand Banking Group may be looking to take over Australian fund manager IOOF Holdings.
IOOF shares jumped 7.1 percent to A$6.45 on triple its usual daily volume and ANZ finished up 3.3 percent to A$23.17. ANZ declined to comment on the speculation. Commonwealth shares finished down 0.1 percent at A$58.05, after gaining 2.3 percent on Friday when it issued its profit upgrade. Top miners were weaker, with BHP Billiton down 0.5 percent at A$43.44. Lihir Gold rose 0.9 percent to A$3.32 after chief executive Arthur Hood stepped down. He is being replaced on an interim basis by Chief Financial Officer Phil Baker, the company said.