Aust stocks close at fresh 5½-year high

Local market lifts amid strong volumes as shares in department stores soar.

The Australian sharemarket has closed at a fresh five and a half year high today amid strong volumes after shares in department stores spiked on takeover news.

At 4.15pm (AEST), the benchmark S&P/ASX200 index added 0.98%, or 53.2 points to 5,463.8 points, while the broader All Ordinaries index lifted 0.94%, or 51.1 points, to 5,460.3 points.

In earlier trade, the benchmark index reached as high as 5,477.4 points, its highest intra-day level since the week of June 16, 2008.

The lift follows a surge in David Jones shares after the retailer backed a $2.15 billion takeover bid from South African retailer Woolworths, as well as a spike in Myer shares as the rival withdrew its proposed merger of equals.

IG chief market strategist Chris Weston said volumes have been strong today after the index hit its highest point in close to six years, with large names gaining.

"If you look at the 50-day moving average, 57% of companies are above, which, compared to the prior high in March where 73% of companies were above, seems low," Mr Weston said.

"This suggests that there is more room to run in the short term, especially as only 21 per cent of the market are 5 per cent or less from a 52-week high.

"David Jones getting a bid for $4.00 a share is always going to help retail as well, especially when you see the South African-based acquirer happy to pay 24 times 2014 earnings.

"The fact that the index is up when the Nikkei is down 2% is bullish, given this is the strongest correlated market."

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