Five-week ASX high ahead of US CPI print

The local share market has rallied to a five-week high as traders bet that an overnight report will show inflation has peaked in the United States, paving the way for a dovish pivot from the world's biggest central bank.

The benchmark S&P/ASX200 index on Thursday closed up 85.1 points, or 1.18 per cent, to 7280.4, its highest close since December 6.

The broader All Ordinaries gained 83.5 points, or 1.13 per cent, to 7489.9.

It was the ASX's sixth winning session out of the past seven and puts the market on track for its best week since November 7-11.

Tribeca Investment Partners portfolio manager Jun Bei Liu told AAP the market was gaining ground over optimism the US consumer price index readout would show inflation had declined for a third straight month, giving the US Federal Reserve leeway to hike interest rates less aggressively when it next meets January 31 and February 1.

"There general feeling is, there's positivity across the board, particularly across those names that have a growth bent, that will benefit from lower interest rates," Ms Liu said.

But she added she thought the "market has probably gone ahead of itself", rallying even though it's not clear the Fed might pivot.

"It's a little bit premature," Ms Liu said.

"So there is a bit of risk that potentially tomorrow, if inflation is in line (with past months) instead of better, the share market might get sold off."

The US inflation readout will be released at 12.30am AEDT on Friday and consensus expectations are that it will show consumer prices rose 6.5 per cent in the 12 months to December, after a print of 7.1 per cent in November and 7.7 per cent in October.

For Thursday, at least, every ASX sector was higher, with financials the biggest gainer, climbing 1.5 per cent as all the big banks grew.

NAB finished up 2.5 per cent to $30.80, CBA rose 1.6 per cent to $105.18, Westpac added 0.9 per cent to $23.50 and ANZ climbed 1.0 per cent to $24.25. Macquarie was up 1.6 per cent to $177.

The mining sector climbed 1.4 per cent as as iron ore prices hit a fresh six-month high of $US121 a tonne amid optimism over China's reopening.

BHP was up 1.8 per cent to $49.38, its highest close ever, with the Big Australian also boosted by copper prices at a six-month high.

Fortescue Metals added 2.8 per cent to an 11-month high of $22.92, Rio Tinto was up 1.5 per cent to a nine-month high of $121.16 and South32 grew 1.1 per cent to $4.55.

Lithium miner Pilbara Minerals was up 4.5 per cent and Allkem grew 1.8 per cent.

In the energy sector, Woodside was up 2.1 per cent to $36.25 but coalminers New Hope, Whitehaven and Yancoal were all down, by between 1.4 and 3.6 per cent.

The Australian dollar was buying 69.09 US cents, little changed from 69.18 cents at Wednesday's ASX close.

Cryptocurrencies were also rallying, with Bitcoin hitting a four-week high of $US18,200 and Ethereum climbing to $US1400, its best level since the collapse of the crypto exchange FTX on November 9.


* The benchmark S&P/ASX200 index closed Thursday up 85.1 points, or 1.18 per cent, to 7280.4.

* The broader All Ordinaries added 83.5 points, or 1.13 per cent, to 7489.9.


One Australian dollar buys:

* 69.09 US cents, from 69.18 US cents at Wednesday's ASX close

* 91.00 Japanese yen, from 91.49 Japanese yen

* 64.20 Euro cents, from 64.36 Euro cents

* 56.91 British pence, from 56.85 pence

* 108.69 NZ cents, from 108.42 NZ cents.