Sydney - Australian stocks maintained their opening-bell rally to the close of trading Monday as investors picked up bargain-basement financials following Canberra's weekend decision to join other governments in guaranteeing bank deposits.

The ASX 200 gained 220 points, or 5.5 per cent, to 4,180.

High Street banks were in demand, with National Australia Bank and ANZ registering gains of almost 10 per cent.

Commsec economist Craig James said that bargain hunting would buoy the market following Friday's 8.3-per-cent crash, the biggest drop since 1987.

"Investors who are embracing the share market at the moment, they may not get in at the total bottom, but we believe we're pretty close to the bottom, and that shares are trading very, very cheaply, the cheapest in around about 24 years," James told national broadcaster ABC.

"There are a lot of bargains to be had, and if people have got confidence for the longer term - two, three, four years out - they're going to be well-rewarded by buying in the current environment."

The Australian dollar also lifted off its lows and was trading at 67 US cents. On Friday it had sunk to 65 cents against the greenback. (dpa)