Australian shares rallied 2 per cent to a one-month high on hopes the eurozone could hold together after Greece's election delivered a slim parliamentary majority to pro-bailout parties.

The local market was one of the first to open after Greece’s pro-bailout conservative New Democracy party, that backs keeping the country in the eurozone and maintaining austerity measures, came in first in the nation’s weekend polls.

The benchmark S&P/ASX200 index jumped 79.6 points, or 2 per cent, higher at 4136.9, while the broader All Ordinaries index rose 76.9 points, or 1.9 per cent, at 4183.9.

Among the sectors, materials and energy both jumped 2.5 per cent, while financials rose 2.1 per cent. Utilities were the only sector to post a fall, slipping 0.2 per cent.

The gain for the ASX200 was the biggest since January 4, with the overall market’s value swelling by about $24 billion.

City Index chief market analyst Peter Esho said the copper price rose after the election result in Greece, leading to big gains among the nation’s miners.

‘‘The sharemarket gains have been driven by a bounce in the materials stocks,’’ Mr Esho said. ‘‘Copper’s a good lead indicator and that’s providing a boost for a lot of the materials stocks that have been pretty beaten up.’’

Greece’s two main pro-bailout parties won enough votes to form a government in Sunday’s knife-edge elections.

The result eases fears that Greece could dump the euro currency and reject austerity measures tied to an international bailout package designed to address its sovereign debt woes.

Top miners powered the market higher, with BHP Billiton up 2.7 per cent to $32.70 and Rio Tinto up 4.7 per cent to $57.08, helped by a surge in copper prices to their highest in nearly three weeks on the back of the Greek vote.

Analysts saw the Greek election as just one of several hurdles, including the US Federal Reserve meeting and G20 summit this week and a European Union leaders summit later this month, that need to be cleared before a stronger push upwards.

The market is counting on additional stimulus from the US Fed and moves by the European Union to ease the austerity measures demanded of Greece, to boost growth and make the debt bailout more palatable to the country.

The big four banks all rose between 1.3 and 3.1 per cent, led by National Australia Bank. ANZ was 57 cents higher at $21.85, National Australia Bank 75 cents higher at $22.87, Westpac was up 46 cents at $20.80 and Commonwealth Bank up 62 cents to $51.51.

Fairfax Media jumped 7.4 per cent to 65 cents, its highest level in two weeks, after announcing an overhaul of its top newspapers and 1900 job cuts over three years to cut costs. It also shored up its balance sheet by selling down its stake in online auction site Trade Me.

The move comes at the same time that mining billionaire Gina Rinehart has been increasing her stake in the publisher and is looking to win at least one seat on the board of the company.

Little Creatures owner Little World Beverages soared 36 per cent after its main shareholder, Japan's Kirin Holdings, agreed to buy out the boutique brewer for $256 million, or $5.30 a share.

Lynas Corp rose 6.3 per cent after the Malaysian government dismissed an appeal against a temporary operating licence for the company's rare earths processing plant in the country.

Electronics retailer JB-HI Fi edged up 0.5 per cent. A substantial shareholder in JB Hi-Fi, the most heavily shorted stock in the top 200, has sold down its stake to two buyers, in trades handled by UBS, two dealers said. A UBS dealer declined to comment on the trade.

BusinessDay with agencies