The sharemarket rose for a 10th consecutive day, extending its longest winning streak since October 2003, as an improving global economic outlook continued to fuel demand for equities before the conclusion of a US Federal Reserve board meeting overnight.
Investors brushed off the federal election announcement, as an exodus from bonds and low-yielding cash was widely expected to drive the sharemarket significantly higher this year.
The benchmark S&P/ASX 200 rose 0.2 per cent to 4896.7 after hitting a 21-month high of 4906.2 in early trading. That followed a 1.1 per cent rise on Tuesday, its biggest one-day gain in four weeks.
"People came back from holidays this week and said, 'I am missing out in this rally,' so they bought all the strongly trending stocks," said Christopher Macdonald, RBS Morgan investment adviser. "The Fed meeting gives reason for a pause, because if we get any hawkish statements out of the Fed it could generate a potential pullback in risk assets."
Sectors contributing to the strength of the sharemarket included energy, materials, industrial, healthcare, financial and property, while consumer, telecommunications and utilities stocks lost ground.
BHP Billiton rose 1.2 per cent following a 0.6 per cent rise in London Metals Exchange copper, and Santos jumped 2.7 per cent after Nymex crude oil gained 1.2 per cent to a four-month high.
Leighton Holdings jumped 4.9 per cent on reports that Ontario Teachers Pension Plan was among final-round bidders for its fibre-optics business.
Wesfarmers fell 1.8 per cent after its Coles supermarkets division reported a 5 per cent rise in food and liquor sales, in line with market expectations, and the performance of its Kmart and Target discount retail chains came in below some analysts expectations.
The conglomerate said its coking coal production would be lower than expected this fiscal year, due to wet weather.
IG chief market strategist Chris Weston said it was healthy to see the resources sector playing catch-up to defensive and high-yield plays.
"It's a good sign of a healthy market when you are getting that rotation to the materials sector," he said. "I think one of the biggest risks, as we come into month end, is portfolio rebalancing. Bonds have significantly underperformed equities and there will have to be a rebalancing from a lot of the pension funds."
Mr Weston said Australian media stocks could benefit from political advertising spending during the election campaign. Fairfax, Seven West Media and Ten Network Holdings rose 1.9 -2.7 per cent.
Discretionary retailers could suffer from a contraction in retail spending during an election campaign because "there's some evidence that retail sales flatten out before elections", said Shane Oliver, director of investment strategy and chief economist at AMP Capital. But Dr Oliver said Australian shares were probably the most attractive asset class. "There is always the possibility that the easy monetary environment really takes hold globally, resulting in a huge surge in economic growth and investor flows back into growth assets," he said.
