Investors enjoyed their best day on the ASX in almost two weeks as the Reserve Bank gave no hint of imminent rate rises and buyers returned for CSL shares.
The market rose 0.86 per cent on Tuesday after the bank showed it was in no hurry to raise rates next year, despite investors betting otherwise.
Market pricing forecasts the cash rate to rise from 0.1 per cent to one per cent by the end of next year as the Australian economy improves and coronavirus restrictions ease.
However the central bank in its December meeting minutes reiterated that wages growth will need to be much higher for a single rate hike.
IG Markets analyst Kyle Rodda said the central bank board was still of the belief the economy was some way from rate hikes.
Market giant CSL was also instrumental in the market gains after its shares jumped almost five per cent.
The biotech last week lost more than eight per cent after revealing it would sell $7 billion in cheap new stock to help buy pharmaceutical group Vifor Pharma.
The rush for CSL stock helped healthcare shares gain almost four per cent and be the top category.
Energy shares were next best. They offset some of Monday's three per cent losses, based on concerns the Omicron variant will stifle travel demand.
Property shares were the only category lower, by 0.37 per cent.
The benchmark S&P/ASX200 index on Tuesday closed up 62.8 points, or 0.86 per cent, to 7355 points.
The All Ordinaries closed higher by 64.5 points, or 0.85 per cent, to 7666.7 points.
The market defied a negative lead from markets in the US, where rising Omicron infections raised the prospect of reintroducing restrictions.
In stocks, Australian Clinical Labs was one of the better performers after strong demand for coronavirus testing.
The company joined the ASX this year and has already upgraded its first-half sales and profit forecast. The latter will be between $116.3 million and $128 million.
Shares were higher by 12.22 per cent to $5.60.
Ardent Leisure has ended talks with a developer about providing a hotel and tourist park next to Dreamworld in Queensland.
The two were unable to agree on key aspects of a deal.
Ardent will continue exploring the tourist park concept.
Shares were down 3.21 per cent to $1.35.
The big miners were all higher after iron ore prices improved. BHP was up about one and a half per cent to $41.71. Fortescue improved by 1.7 per cent to $19.79. Rio Tinto gained 3.23 per cent to $101.40.
The big four banks as well as Bendigo and Bank of Queensland were all higher by less than one per cent.
Elsewhere in financials, AMP will have its shares traded on the ASX only and delist from the New Zealand stock exchange.
The delisting will simplify managing shareholders before the demerger of AMP's private markets arm next year.
Shares gained about half a per cent to 92 cents.
Meal kit provider Marley Spoon bought smaller Australian rival Chefgood for $21 million.
Chefgood makes its food in Melbourne and targets health-conscious consumers.
Marley Spoon will sell $8 million in shares to help fund the deal.
Shares improved by about 20 per cent to 84 cents.
The Australian dollar was buying 71.19 US cents at 1708 AEDT, higher from 71.07 US cents at Monday's close.
ON THE ASX
* The benchmark S&P/ASX200 index on Tuesday closed up 62.8 points, or 0.86 per cent, to 7355 points.
* The All Ordinaries closed higher by 64.5 points, or 0.85 per cent, to 7666.7 points.
* At 1708 AEDT, the SPI200 futures index was even at 7261 points.
One Australian dollar buys:
* 71.19 US cents, from 71.07 cents on Monday
* 80.97 Japanese yen, from 80.58 yen
* 63.12 Euro cents, from 63.12 cents
* 53.87 British pence, from 53.72 pence
* 105.80 NZ cents, from 105.71 cents.