Australia shares hit 4-month high

 Australian shares climbed to a fresh four-month high on Monday as investors shrugged off lacklustre economic figures from the United States and China to bet on an expected central bank rate cut pumping extra cash into equities.

Bounces in key commodities prices at the weekend also pushed resources stocks higher.

In less than six months, economists have changed from predicting that the Reserve Bank of Australia would lift interest rates in 2015 to tipping a rate  cut at the central bank's next meeting on Tuesday.

That has overshadowed a weaker lead from Wall Street, where stocks fell on Friday amid concerns about weak US growth data and the possibility that instability in Europe will hurt corporate earnings.

Meanwhile, China's Purchasing Managers' Index (PMI) unexpectedly shrank for the first time in nearly 2-1/2 years in January, according to figures released at the weekend.

"Everyone's just sitting waiting to see what the rates do tomorrow," said Quay Equities director Andrew West, noting unusually light turnover.

"The PMI was quite weak out of China over the weekend, but oil had a good run so that's keeping some of the resources stocks up."

The S&P/ASX 200 index rose 0.6 per cent or 33.3 points by 0130 GMT, its highest intraday level since September 5. The benchmark has risen for each of past eight sessions.

Mining giant BHP Billiton rose 1.8 per cent and Rio Tinto edged up 0.1 per cent as commodities rose across the board.

Horizon Oil led oil stocks higher, echoing a rebound in the oil price, up 8 per cent and the biggest gainer in the index. Rival Beach Energy jumped 5.2 per cent, the fifth biggest gainer, and oil giant Santos grew 1.7 per cent.

Gold giant Newcrest Mining rose 2.8 per cent and smaller gold player Evolution Mining jumped 7 per cent after the gold price gained ground