Record highs on Wall Street lift confidence

The market has started the week higher, with global investor sentiment boosted by record highs on Wall Street.

Investors appear increasingly confident equity markets will be able to withstand an inevitable reduction in stimulus from the US Federal Reserve in coming months.

On Monday, the benchmark S&P/ASX 200 Index added 16.9 points, or 0.3 per cent, to 5352.8 after taking a positive lead from the US, where the S&P 500 closed at a record 1804.76 points and the Dow Jones rose to a record 16064.77.

"Both the S&P 500 and Dow Jones in record territory is proof that positive economic data is finally being recognised as a good thing, rather than making the market nervous that signs of growth could make tapering more imminent," Arnhem Investment Management head trader Simon Twiss said. "The US housing starts and consumer confidence numbers [due for release on Tuesday night Australian time] are likely to be a focus for investors this week because of their ability to influence when the Federal Reserve starts winding back the value of its asset purchases."

Healthcare was the best-performing sector, up 1.2 per cent, as several exchange rate-sensitive health stocks benefited from a fall in the dollar to US91.47 at the local close, down from US91.76 at Friday's close.

Commonwealth Bank dropped 0.3 per cent to $76.27, while ANZ rose 0.4 per cent to $31.79, National Australia Bank added 0.5 per cent to $34.10 and Westpac edged up 0.1 per cent to $32.52.

Goodman Fielder shed 7.1 per cent to 65.5¢. Warrnambool Cheese & Butter Factory added 2 per cent to $9.23 after Canadian suitor Saputo raised its offer to $9.20 a share.

Australia's two biggest miners closed higher after the spot price of iron ore, landed in China, added 0.2 per cent to $US136.50 a tonne. BHP Billiton rose 0.2 per cent to $37.89, while Rio Tinto gained 0.2 per cent to $65.40.

Goldminers suffered as the spot price of gold dipped to $US1239.05 at the local close. Energy stocks were mostly lower as the Brent crude oil price fell 2.3 per cent to $US108.53 a barrel.