Australian share prices rose 1.31 percent on Monday to just short of a record finish as investors cheered gains on Wall Street and anticipated a very positive budget due on Tuesday, dealers said.
They said the upturn on Wall Street to six-year highs on the prospect that US interest rates are close to peaking combined with expectations the government will unveil a generous budget to drive the market ahead.
The key S and P/ASX200 index rose 68.6 points to 5,324.0, just short of the record 5,327.2 posted on April 26, 2006. The broader All Ordinaries climbed 64.0 points to a record high of 5,273.5.
Turnover was 1.67 billion shares worth 4.34 billion dollars (3.34 billion US) with rises outnumbering falls 661 to 483 and 328 stocks unchanged.
Dealers said that continued rises in metal prices and reduced interest rate hike expectations in the United States made for a positive start when coupled with the budget hopes.
CommSec chief equities economist Craig James said the Australian market "played follow the leader" to gains on foreign markets on Friday.
National Australia Bank rose 0.83 dollars or 2.27 percent to 37.40 dollars while the three other major banks were also higher - Commonwealth Bank adding 0.30 to 46.40, Westpac gaining 0.18 to 24.61 and ANZ climbing 0.28 to 28.20. Many retailers were also higher, despite official data released Monday showing retail sales in March were below market expectations, on expectation of benefits for families in Tuesday's budget.
Woolworths gained 0.12 to 18.88, David Jones rose 0.12 to 2.72 and Harvey Norman added 0.13 to 3.80 but Coles Myer fell 0.08 to 10.72.
Among the major resource stocks, BHP Billiton put on 1.09 or 3.60 percent to 31.39 and Rio Tinto enjoyed a rise of 2.94 or 3.55 percent to 85.69. For the gold stocks, Newcrest added 0.87 to 24.00, Oxiana rose 0.14 to 3.68 and Lihir Gold gained 0.06 to 3.35. Telstra added 0.01 to 3.86 while SingTel was unchanged at 2.27.
Logistics and transport firm Toll Holdings gained 0.60 or 4.58 percent to 13.70 after taking legal action against its take-over target Patrick Corp, saying a competing bid led by Macquarie Bank went against an agreement Toll had with Patrick. Patrick shares fell 0.08 to 8.90.