The Government will begin transferring $10.4 billion to the bank accounts of pensioners and families from today in a bid to stimulate consumer spending.
However, analysts have warned it could take some time for the package to make much difference, The Australian reported.
The promising mood for Australian markets follows gains last Friday on Wall Street, as the Dow Jones Industrial Average finished 3.1 per cent higher, up 259.18 points on the previous session at 8635.42.
Traders had a shaky start to Friday as data showing the biggest drop in US payrolls in almost 34 years drove the Dow to a mid-morning low.
The US Labour Department reported that non-farm payrolls shrank by 533,000 jobs in November -- the worse monthly decline since December 1974.
That report followed the National Bureau of Economic Research's revelation earlier last week that the US economy had been in recession for nearly a year.
Despite the weight of the bad news, the market recovered later in the day, rising steadily to end Friday up 3.1 per cent on the previous session, although it was down 2.2 per cent for the week.
In contrast, Australian markets finished last week on a sombre note on fears of a global recession, with the S&P/ASX 200 down 42.5 points, or 1.2 per cent, at 3489.9, dragging losses for the week to nearly 7 per cent, while the All Ordinaries index was down 40.9 points to 3427.2.
Citi Smith Barney adviser Fabiola Gibson said Australian markets should benefit from the positive performance of the Dow on Friday in the face of the negative data.
"Given that Wall Street rallied so strongly on Friday you'd expect some of that positive news to flow through to the Australian market for the opening on Monday morning," Ms Gibson said.
"The rally was on relatively low volume but the market will still be focusing on the deteriorating economic outlook."
The volatility would continue and market watchers would be keenly following the debate between Congress and the White House on the proposed $US15 billion bailout package for struggling US car makers General Motors, Chrysler and Ford, Ms Gibson said.
Read more in The Australian
Home loan troubles break records again
Westpac outshines rivals
Dollar above US65c as shares gain
