Black October was anything but for Australian investors, as broad gains, fuelled by speculation that the US Federal Reserve would continue printing money, pushed the local market to five-year highs.
For October, the benchmark S&P/ASX 200 Index surged 206.6 points, or 4 per cent, to 5425.5. The broader All Ordinaries was 202.5 points, or 3.9 per cent, higher at 5420.3. For the day, the ASX 200 and All Ordinaries ended slightly lower, both down 0.1 per cent.
"Markets are generally taking the view that central banks are keeping monetary settings very low, and that's obviously very conducive for equity markets," said Macquarie division director Martin Lakos.
The US Fed, widely expected to begin tapering its $US85 billion bond-buying program in September, has held steady. Economists now say that Fed members do not confidently believe that the US economy could continue its recovery if it were to turn off the money tap.
ANZ's head of interest rates, Tony Morriss, said that to start tapering, the Fed needed more evidence that the US economy was close to around 3 per cent annualised growth. "Thus, a case for tapering before year end is fading, given the data shows the US economy is tracking below the Fed baseline view and are losing momentum," he said.
"We expect the slowing to be temporary and for the data to be convincing enough for the FOMC to start tapering by Q1 2014."
Despite a government shutdown and the threat of the American debt ceiling not being raised, the Australian market generally ignored cries of a financial apocalypse.
"When you're in a bull market - and we've got to start being prepared to call this a bull market - the risk is that you do get quite a high degree of momentum and you do find that stocks run ahead of themselves and the earnings catch up to the stock prices," Mr Lakos said.
All major sectors posted gains in October. Financial stocks were once again the flavour of the month, with three of the big four banks hitting record highs as the sector added 5.5 per cent.
Commonwealth Bank, ANZ and Westpac all hit record highs during the week, with NAB trading close to six-year highs.
Despite a soft end to the month, which saw banks heavily sold off on Thursday, for the month, CBA rose 6.8 per cent to $76.08, and ANZ pushed 9.9 per cent higher to $33.84, edging ever closer to the exclusive $100 billion club with a market capitalisation of $93 billion.
Westpac jumped 4.7 per cent to $34.29, and NAB gained 2.9 per cent to $35.31.
The telecommunications sector had a 4.4 per cent rise for the month, led by a 4.2 per cent jump in Telstra that took it to 10-year highs of $5.18.