Positively reacting to the removal of Prime Minister Kevin Rudd, share prices of the country's resources industry shot up as investors start projections of a tempered mining tax in the coming days.

Mining companies which earlier reported of plunging share values are now reporting of improving stocks with Rio Tinto shares gaining $1.76 or 2.5 percent to settle at $72.30 as of 1015 AEST.

Also around the same time, BHP Billiton was trading at $39.94, improving by 80 cents or 2.04 percent while Fortescue Metals Group Ltd shares went up by 18 cents or 4.06 percent to $4.61.

David Taylor of CMC Markets said that the development clearly indicated of a direct link on the rise of mining industry stocks to the ascension of Julia Gillard as Australia's next-in-line prime minister.

Mr Taylor believed that the people have spoken and the market is witnessing the direct correlation as "metals were mixed, and the basic fundamental offshore lead was mixed overnight and there is hope of a possible watering down of the resources tax now that the leadership change has been announced."

He said that the news of Mr Rudd on his way out spurred the increasing valuations of resources stocks, adding that "with the tax factored in, company values fell, and now with the tax now looking like it might not be as intense."

Just the before the market opened on Thursday, Deputy Prime Minister Gillard was elected as new leader of the Labour Party, automatically sending her to replace the incumbent Mr Rudd, who was battered by controversies surrounding the proposed resources super profits tax.