Investors anticipating a big-spending federal budget have helped the share market close 2.59 per cent higher, as all sectors rose.

The S&P/ASX200 benchmark index closed higher by 150.1 points, or 2.59 per cent, to 5941.6 points on Monday.

The gain is the best since the 3.89 per cent jump of June 16.

The All Ordinaries index finished up by 151.9 points, or 2.54 per cent, to 6135.1.

Treasurer Josh Frydenberg has flagged Tuesday’s budget will contain many measures to create jobs and help the economy out of the coronavirus recession.

The Reserve Bank may join those efforts earlier in the day if it cuts the cash rate from 0.25 per cent.

Investors may also have been encouraged that doctors for President Donald Trump said he may leave hospital as early as Monday (US time). His coronavirus infection has cast uncertainty over the US election on November 3.

The Aussie dollar was buying 71.81 US cents at 1619 AEDT, higher from 71.41 US cents after the close of trade on Friday.