THE sharemarket opened strongly following news China will lift controls on lending interest rates.

At 10.10am AEST the benchmark S&P/ASX200 index was up 49.4 points, or 0.99 per cent, at 5021.5, easing to 5,007.3 by 10.25am for a total gain of 0.71 per cent.

The broader All Ordinaries index was up 47.4 points, or 0.96 per cent, to 5006.8 initially, slipping marginally to 4,992.9, a rise of 0.68 per cent.

IG market strategist Chris Weston said the market received a boost from news China's central bank will give lenders more control to set interest rates.

The People's Bank of China on Friday night said banks would now be allowed to set their own lending rates, in a move many hope will provide some stimulus for the economy.

Mr Weston said the move had provided a "psychological boost" for the market.