The sharemarket gained ground as investors took a cautiously optimistic stance before a keenly awaited update on economic stimulus measures in the United States.
The benchmark S&P/ASX 200 Index gained 47 points, or 0.98 per cent, to 4861.4, while the broader All Ordinaries Index gained 47.2 points, or 0.98 per cent, to 4841.8.
Federal Reserve chairman Ben Bernanke was to update the market overnight in the US, and investors are keen for an update on the Fed's $US85 billion ($89 billion) a month asset purchase program, known as quantitative easing (QE).
The Fed has indicated the bond purchases will continue until the outlook for the US job market improves substantially, but investors want a clearer timetable.
"With the marquee event of the week now imminent, traders have been positioning for a QE-friendly stance from Bernanke," CMC Markets senior trader Tim Waterer said.
But any notice from the Fed that it will begin pulling back on economic support would be bad for markets, he said.
"While the ASX 200 undoubtedly enjoyed a productive session, if Bernanke does not tell the market what it wants to hear this evening then today's gains could quite easily be reversed."
Almost all sectors of the market rose on Wednesday, although the banks were slightly weaker.
"Materials stocks were among the highlights on the Australian market today, while the energy sector found confidence from the strengthening oil price," Mr Waterer said.
Rio Tinto added 83¢ to $54.38 and BHP Billiton gained 30¢ to $32.99. Woodside Petroleum rose 82¢ to $35.65, Oil Search gained 16¢ to $8 and Santos was 15¢ higher at $12.80.
Among the banks, Westpac lost 22¢ to $29.23, Commonwealth Bank dropped 13¢ to $68.36, ANZ shed 3¢ to $28.35 and National Australia Bank gained 30¢ to $30.04.
The spot price of gold in Sydney finished at $US1369.24 an ounce, down $US9.66.
Meanwhile, the dollar recovered from early weakness to end little changed as traders marked time before the Fed meeting.
Late on Wednesday, the Aussie was trading at US94.91¢, after trading as low as US94.34¢.
A winding back of the Fed's QE program would suggest the end of near-zero short-term rates in the US is also getting closer.