Westpac has become the latest stock to top $100 billion in market capitalisation, as the big banks led a broad-based sharemarket rally.
The benchmark S&P/ASX 200 jumped 86.2 points, or 1.7 per cent, to 5102.4, its biggest one-day gain in more than a month as investors bet that lower than expected inflation data would trigger another rate cut by the Reserve Bank. The broader All Ordinaries added 81.6 points, or 1.6 per cent, to 5084.2.
The financial sector was the biggest driver, surging 2.1 per cent, as investors chased higher-yielding stocks. Westpac is just the third company after BHP Billiton and CBA to be worth more than $100 billion, with its market capitalisation reaching $100.9 billion after the day's rally.
Westpac shares pushed up 2.5 per cent to $32.50, a record high. Commonwealth Bank shares also hit a record high, jumping 2.4 per cent to $71.70, which took the bank's market capitalisation to $115 billion. Discounting BHP's London shares, CBA is the biggest stock on the local market.
ANZ and NAB also had strong gains, rising 2.2 per cent to $29.90 and 2.2 per cent to $32.76 respectively. "It's all about yield. Look at the big four banks, Telstra, all up, really strongly," said RBS Morgans senior trader Luke McElwaine.
Telstra shares added 0.8 per cent to finish at $4.88, their highest point since February 2008.
The Nikkei closed 2.3 per cent higher and China's benchmark CSI300 rose as much as 2.5 per cent.
There were no flow-on effects from a mini-crash on Tuesday in the US. The sudden drop was sparked by a fake tweet that was sent out under Associated Press' account, which said there had been explosions at the White House. US stocks plunged about 1 per cent, before recovering on news it was a fake tweet.
Local shares also enjoyed a boost from inflation figures that came in lower than expected. Inflation increased 0.4 per cent quarter-on-quarter and 2.5 per cent year-on-year.
The Australian dollar continued to trade a little above a six-week low of $US1.0221, reached on Tuesday.