The Australian stock market has closed above the 5,400 psychological threshold as investors expect monetary stimulus to continue in the United States for the time being.
At the 1615 AEDT official market close, the benchmark S&P/ASX200 index rose 0.86 per cent to 5,401.7 points, while the broader All Ordinaries index lifted 0.83 per cent to 5,396.2 points.
IG analyst Stan Shamu said it has been risk-on across Asia today as markets responded well to comments from the White House nominee to lead the Federal Reserve, Janet Yellen.
"While acknowledging the economy is significantly stronger and continues to improve, she said the US economic recovery is still fragile and as a result, prematurely pulling aid could derail the recover," Mr Shamu said.
"She seems to have struck the right balance; the US dollar did not sell off on her comments, while US equities rallied to record levels."
CMC Markets analyst Betty Lam said volumes in the local market were notably thinner in afternoon trade as investors consider their next steps.
"Banks are back in favour following a week’s worth of sell-off post dividend action."
