(Updates closing prices, adds contribution in terms of market value by "Big Four" banks)
By Tom Westbrook and Byron Kaye
SYDNEY, May 20 (Reuters) - Australian banking, property and private health insurers helped propel the broader sharemarket to an 11-year high on Monday as investors cheered the conservative coalition parties' surprise election victory over the weekend.
The benchmark S&P/ASX 200 index .AXJO closed 1.7% higher at 6,476.10 points, its highest level since 2007.
Shares of the country's biggest lender, Commonwealth Bank of Australia CBA.AX , No. 2 rival Westpac Banking Corp WBC.AX , market No. 3 Australia and New Zealand Banking Group Ltd ANZ.AX and the fourth-largest lender, National Australia Bank Ltd NAB.AX , rallied between 6.3% and 9.2%.
The 'Big Four' banks added over A$27 billion ($18.70 billion) in combined market value in the trading session.
"The uncertainty has been removed," said Jason Beddow, chief executive officer of A$5.3 billion fund manager Argo Investments Ltd ARG.AX .
"For about a year we've been talking about all these Labor policies and looking at the polls thinking they're going to get in. And in 24 hours all the things everyone's been talking about for a year just don't really matter, which is extraordinary."
With just over two-thirds of votes counted, the Australian Electoral Commission (AEC) said Prime Minister Scott Morrison's coalition has won 75 seats in Australia's parliament, one seat short of a 76-seat majority. major opinion polls had pointed to a victory for the centre-left Labor party. Labor had campaigned on a policy of closing some tax loopholes for owners of investment properties, which had economists anticipating downward pressure on house prices already in decline.
Shares of property classifieds company REA Group REA.AX were up as much as 7.6% to a record high before easing slightly, while those of its rival Domain Holdings Australia DHG.AX ended 2.3% higher during the session.
Private health insurance stocks also rose sharply. Labor had campaigned on promises to curb annual rises in private health insurance premiums.
Shares of the country's biggest private health insurer Medibank Private MPL.AX were up 11.5%, while smaller NIB Holdings NHF.AX surged 15.8%. Both stocks were the top gainers on the benchmark.
The Australian dollar AUD=D3 also got a lift, and was last at $0.6906, having bounced from a four-month trough of $0.6865. AUD/
Yet markets are still convinced the Reserve Bank of Australia (RBA) will have to cut interest rates in the next few months, given protracted weakness in inflation and wages and a recent uptick in the unemployment rate.
The futures market 0#YIB: implies a 62% chance of a quarter point cut in the 1.5% cash rate when the RBA board next meets on June 4. A move is almost fully priced for July and a further cut to 1% is baked in by December.
Coal companies Whitehaven Coal WHC.AX and New Hope Corp NHC.AX were up 1.4% and 1.8% respectively as climate change activists failed to sway the polls as much as expected.
Morrison, a coal promoter, won in part due to strong opposition to Labor in the coal mining heartland of Queensland state. New Zealand, the benchmark S&P/NZX 50 index .NZ50 ended the day up 0.5% or 53.35 points to 10,234.15.
NZ-listed shares of two of the 'Big Four' Australian-owned banks, Westpac WBC.NZ and ANZ ANZ.NZ led the gains, up 9.1% and 7.7% respectively.
($1 = 1.4440 Australian dollars)