The Australian share market has soared to a four-month high after the US Federal Reserve left interest rates on hold and forecast it would cut them repeatedly in 2024.
The benchmark S&P/ASX200 index on Thursday finished up 120.1 points, or 1.65 per cent, to 7,377.9, its best closing level since August 1.
The gains rivalled last week's 116.8-point rally.
On both days the ASX200 climbed 1.65 per cent, the most since a 2.78 per cent rise on November 11, 2022.
The broader All Ordinaries on Thursday rose 130.3 points, or 1.74 per cent, to 7,599.4.
Bell Direct market analyst Grady Wulff told AAP it was the ASX's best day of the year.
"So the obvious question is do we have a pullback coming in the future?" she said.
"I honestly don't think we do because there's so much resilience in the market right now.
"There's a lot of optimism that we are headed for a soft landing more than a recession.
"So with all that in mind, things are looking up, not only for the Santa rally but headed into 2024."
The gains came after the US Federal Reserve eased its language on rate hikes, emphasised it was making headway on inflation, and forecast three rate cuts for next year.
"The market has been looking for a dovish pivot from the Fed, and today it got that," JP Morgan economists wrote in a client note.
The US dollar dropped against other currencies, including the Australian dollar, which hours later rose further against the greenback - climbing to more than 67 cents for the first time since August 1 - after a mixed Australian labour market readout for November.
The unemployment rate rose to 3.9 per cent, up from a revised 3.8 per cent in October, but the economy also added 61,500 mostly full-time jobs, crushing expectations for 11,500 new roles.
Every sector of the ASX finished higher, with the interest-rate-sensitive real estate sector the biggest gainer, soaring 3.9 per cent.
Property fund manager Charter Hall soared 11.8 per cent to a nine-month high of $12.34, peer Centuria Capital rose 9.2 per cent to an almost six-month high of $1.72 and developer Lendlease rose 5.3 per cent to a three-month high of $7.36.
The heavyweight mining sector was up 2.4 per cent with BHP adding 0.8 per cent to $48.25, Fortescue adding 1.6 per cent to an all-time high of $27.46 and Rio Tinto climbing 0.4 per cent to $130.04.
Gold miners were shining as the price of the precious metal spiked from $US1,980 an ounce to more than $US2,036 on the Fed's pivot.
Northern Star added 8.1 per cent to a five-month high of $13.18 and Evolution gained 3.9 per cent to a one-week high of $3.70.
Lithium miners also had a stellar day, with Pilbara Minerals up 8.6 per cent and Allkem climbing 10 per cent.
All the Big Four banks rose, with ANZ ahead by 1.0 per cent to $25.24, CBA adding 1.3 per cent to $109.52, Westpac rising 0.7 per cent to $22.29 and NAB finishing 0.6 per cent higher at $29.95.
Insurance companies, whose bottom lines are generally hurt by lower interest rates, were among a small group of companies in the red.
IAG fell 1.9 per cent, Suncorp dropped 1.6 per cent and QBE fell 2.6 per cent.
New Zealand breast cancer detection company Volpara Health Technologies soared 41.3 per cent to $1.095 after agreeing to be acquired by South Korean medical software company Lunit for $295.7 million.
The Australian dollar was buying 67.13 US cents, from 65.58 US cents at Wednesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Thursday up 120.1 points, or 1.65 per cent, at 7,377.9.
* The broader All Ordinaries climbed 130.3 points, or 1.74 per cent, to 7,599.4.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 67.17 US cents, from 65.58 US cents at Wednesday's ASX close
* 95.22 Japanese yen, from 95.48 Japanese yen
* 61.62 Euro cents, from 60.79 Euro cents
* 53.14 British pence, from 52.22 pence
* 107.75 NZ cents, from 107.49 NZ cents.
