The share market closed just short of a 17-month high, with small losses in energy shares offsetting a broad rally in most other sectors.
The All Ordinaries rose a half of a per cent to close at 4,611 and the ASX 200 posted a similar gain, up 22 points to 4,595.
The major mining shares saw a boost from the 10th straight rise in iron ore prices overnight and was back over US$132, a near five-month high.
BHP Billiton rose 0.9 per cent, while Rio Tinto, which is more exposed to iron ore, gained 1.9 per cent.
Fortescue Metals jumped 2.9 per cent to $4.60.
Shares in the Commonwealth Bank rose a quarter of a per cent on the day it increased its one-third stake in Aussie Home Loans to 80 per cent.
Analysts say the move will strengthen Commonwealth's domination of Australia's mortgage market.
The other three major lenders saw similar results; NAB fared the best, up a half of a per cent in line with the rest of the market.
Embattled surfwear retailer Billabong remains in a trading halt amid speculation a former company executive has made a bid for the company.
Billabong is expected to make a statement about a possible takeover offer.
Shares in construction company Lend Lease, meanwhile, closed up 1.25 per cent to $9.70.
It says it is working with the Victorian Government while it reviews the state's building and construction code of practice.
There are reports Lend Lease has been banned from state contracts for up to four years because of an agreement with a union.
In economic news, the show the bank cut the cash rate to a historic low of 3 per cent to support growth in the broader economy.
The minutes note the peak in mining investment is near and conditions elsewhere in the economy remain "subdued".
The Australian dollar was slightly lower against the greenback, and around 5pm (AEDT) was buying 105.4 US cents, 80 euro cents, a near 11-month high of 88.6 Japanese yen, and 65 British pence.
Spot gold recovered recent steep losses and was trading at $US1,702 an ounce, West Texas crude oil was up to $US86.70 a barrel while Tapis crude rose to $US114.55 a barrel.