The Australian share market has reached its highest point in four and a half years as investors had a more positive view of the deadlocked Italian election.
At the close on Thursday, the benchmark S&P/ASX200 index was 67.5 points, or 1.34 per cent, higher at 5,104.1.
The index reached an intraday peak of 5,112.5 minutes before closing time, touching the highest level reached since September 2008, when US financial giant Lehman Brothers collapsed.
Meanwhile the broader All Ordinaries index was up 67.3 points, or 1.33 per cent, at 5,120.4.
On the ASX 24, the March share price index futures contract was 66 points stronger at 5,087 with 32,850 contracts traded.
IG Markets dealer Chris Weston said the Australian market followed Wall Street higher after an Italian bond auction posted strong results.
"We saw a much improved Italian bond auction, which gave a green light to traders globally to buy stocks in the face of a dark political situation there," he told AAP.
"There's no reason why this market can't keep going higher."
Supermarket giant Woolworths closed 92 cents, or 2.71 per cent, higher at $34.93 after announcing a first half net profit rise of 19.4 per cent to $1.15 billion.
Retailer Harvey Norman added 21 cents, or a substantial 9.21 per cent, to $2.49 despite posting a 36.5 per cent drop in half year profit from weaker sales and falling property values.
Still, Mr Weston said Harvey Norman's upbeat sales growth enticed investors.
"The discretionary sector's clearly the best performing sector this year," he said.
"It's been ages since we've seen any positive rhetoric coming from that company - they're always very cautious."
The big four banks drove the market higher, with the Commonwealth Bank closing $1.26, or 1.91 per cent firmer, at $67.27 and Westpac adding 57 cents, or 1.89 per cent, to $30.77.
National Australia Bank added 17 cents to finish at $30.20 while ANZ gained 44 cent to $28.72.
Meanwhile, Treasury Wine Estates shares added 40 cents to $5.30 after posting a 30.8 per cent rise in half year net profit.
On economics, Mr Weston said official capital expenditure showing a four per cent increase for 2012/13 diluted expectations of an interest rate cut in March.
The spot price of gold in Sydney was $1599.19 per fine ounce, down $US10.99 from Wednesday's local close at $US1610.17 per ounce.
Updated national turnover was 2.117 billion securities worth $6.668 billion, with 603 stocks up, 423 down and 352 steady.