Australia shares rally, miners & oil firms lead, Billabong soars

An office worker talks on his phone as he looks the stock board at the Australian Securities Exchange (ASX) building in central Sydney June 15, 2012.

SYDNEY (Reuters) - Australian shares rallied 0.6 percent on Monday, led by mining and oil stocks, recovering ground after last week's losses on hopes the U.S. can resolve a federal budget wrangle over expiring tax cuts and imminent spending curbs.

The big mover of the day was surfwear company Billabong Ltd (BBG.AX), which surged 10.1 percent after it said one of its directors wanted to investigate a leveraged buyout of the firm. The move comes after potential buyers withdrew takeover offers last month.

The benchmark S&P/ASX 200 index .AXJO ended 24.6 points higher to 4,361.4. The benchmark fell 2.8 percent last week.

"<Markets are rallying> in response to a stronger market in the U.S. on Friday night," said Ric Spooner, senior trader at CMC markets.

Among miners, BHP Billiton Ltd (BHP.AX) climbed 0.9 percent while rival Rio Tinto Ltd edged up 0.3 percent. Necrest Mining Ltd (NCM.AX) jumped 1.8 percent.

Oil firms also gained after oil prices rose on Friday as a fire on a Gulf of Mexico platform and the escalating conflict between Israel and Gaza Palestinians added to supply concerns.

Woodside Petroleum Ltd (WPL.AX) rose 1.1 percent while Caltex (CTX.AX) inched up 0.1 percent.

Santos (STO.AX) climbed 3.9 percent after it announced a gas discovery at its Crown-1 exploration well, located in the Browse Basin off Western Australia.

New Zealand's benchmark NZX 50 index .NZ50 slipped 0.1 percent, or 5.2 points to 3,942.6.

(Reporting by Thuy Ong; Editing by Eric Meijer)