Sydney - Australian stocks registered a 5-per-cent gain Monday after a strong rally in US markets on Friday.

The ASX 200 put on 203 points, or 5 per cent, to 4,221 in early trading.

It was the second consecutive session the bellwether index has finished about the psychologically important 4,000 mark.

CommSec economist Craig James said that "there seems to be a sense that things are settling down" and that irrational fears among investors are subsiding. (dpa)