Australia's share market has risen to its highest level in more than three-and-a-half months helped by a broad-based rally across sectors as investors largely ignored a surge in Omicron coronavirus cases locally and overseas.
The benchmark S&P/ASX200 index ended 89.5 points, or 1.21 per cent, higher at 7509.8 points on Wednesday, its highest level since early September.
The All Ordinaries index rose 95.6 points, or 1.23 per cent, to 7840.3 points.
Australian investors followed the trend in overseas markets where European stocks had closed higher and Wall Street saw a record-setting session as investors discount concerns over the raging Omicron variant.
Investors have returned to risk assets, from oil to commodities to currency, amid subsiding worries about the health and economic impact of Omicron-driven disruptions.
Markets globally are seeing the seasonal Santa rally, when traditional heavyweights make gains amid thin trading volumes in the lead up to the year-end.
IG market analyst Kyle Rodda said while investor sentiment had improved in recent days, "one shouldn't attempt to infer too much from the price action, with volumes in a holiday lull".
That allowed investors to shrug off a surge in cases in Australia's biggest states. NSW had a record 11,201 new infections on Wednesday, while Victoria also hit an all-time daily high of 3,767 cases.
There were broad-based gains in the local market, with banks, energy and mining sectors - which have the highest weightage in the main indices - leading the charge.
Each of the Big Four banks were up between 1.2 and 1.5 per cent with traders betting on improving prospects as the economy rebounds despite the Omicron blip.
Other sector mainstays such as Challenger Financial, QBE and Medibank also scored gains of over 2.0 per cent each.
In the materials sector, the big miners remained subdued with Fortescue Metals Group and BHP managing to edge into positive territory.
But action was focused among the smaller battery mineral stocks such Iluka Resources, Lynas and Sandfire Resources, which rose around 4.0 per cent each, while lithium producer Pilbara Minerals powered 7.1 per cent higher to a fresh record high of $3.17.
Energy stocks also benefited as crude oil prices settled near $US80 a barrel because of supply outages and expectations of a fall in US inventories. Oil and gas explorer Santos added 0.4 per cent, while Woodside Petroleum rose 2.2 per cent.
ResMed, Ramsay Healthcare and Cochlear led the gains in healthcare stocks, rising more than 1.0 per cent each.
Consumer stocks were also in the limelight amid the focus on household spending. Supermarket giants Coles, Woolworths and Metcash rose between 1.5 and 2.2 per cent, while dairy producers Bega and A2Milk climbed 3.9 per cent and 0.5 per cent respectively.
Among the rare stocks bucking the trend, Afterpay dropped 1.8 per cent to 85.08, while TPG fell 1.3 per cent to $5.89.
Meanwhile, the Australian dollar slipped back from a five-week high and was buying 72.31 US cents at 1700 AEDT, little changed from 72.28 US cents at Friday's close.
ON THE ASX
* The benchmark S&P/ASX200 index closed 89.5 points, or 1.21 per cent, higher at 7509.8 points on Wednesday.
* The All Ordinaries index rose 95.6 points, or 1.23 per cent, to 7840.3 points.
* At 1700 AEDT, the SPI200 futures index was unchanged at 7415 points.
One Australian dollar buys:
* 72.31 US cents, from 72.28 cents on Friday
* 83.05 Japanese yen, from 82.64 yen
* 63.95 Euro cents, from 63.81 cents
* 53.83 British pence, from 53.91 pence
* 106.37 NZ cents, from 106.11 cents.