Australian stocks touched a one week high on Wednesday, with the mining and financial sector leading the broader market. The benchmark S&P/ASX200 index was up 79.9 points, or 1.73 per cent, at 4,686.8, while the broader All Ordinaries index had risen 77.4 points, or 1.66 per cent, to 4,738.0. During the day, the S&P/ASX200 reached 4,693.3 points, the index's highest level since September 29, when it hit 4,698 points. On the Sydney Futures Exchange, the December share price index contract was 62 points higher at 4,690, with 34,244 contracts traded. The local market opened more than one per cent firmer, and extended gains through the day following a positive lead from Wall Street and higher commodities prices during the offshore session. Major miners BHP Billiton and Rio Tinto outperformed the overall market, after Rio said it had not yet decided whether to terminate or proceed with its proposed West Australian iron ore joint venture with BHP. BHP finished up $1.03, or 2.61 per cent, at $40.53, while Rio gained $1.99, or 2.58 per cent, to $78.99. In other mining news, Fortescue Metals said it had been ordered to pay $US3.7 million in a dispute with Armada (Singapore) Pte Ltd over a cancelled shipping contract. The miner ended up 21 cents, or 4.01 per cent, higher at $5.45.

The big retail banks closed more than one per cent higher ANZ ended up 50 cents at $24.07, CBA climbed 59 cents to $51.84, NAB was 51 cents firmer at $25.88 and Westpac advanced 31 cents to $23.42. The spot price of gold in Sydney was at $1,345.90 per ounce, up $28.625 from Tuesday's local close of $1,317.275. Gold hit record highs during offshore trading, amid ongoing concern about the value of major currencies, especially the US dollar, and a surprise interest rate cut by Japan. Gold miner Newcrest finished as the best performer on the S&P/ASX20, closing up 3.47 per cent, or $1.41, at $42.01. Just one stock on the S&P/ASX20 Westfield finished in red figures, with the shopping centre giant easing two cents to $12.60. Making news on Wednesday, shares in Aevum entered a trading halt pending the retirement village operator's finalisation of an agreement with Stockland, which is in the process of buying Aevum. Aevum last traded at $1.77, while Stockland ended up one cent at $3.93.

Retail stocks also had a good day, with JB Hi-Fi among the strongest performers, closing up 55 cents, or 2.68 per cent, at $21.05. Others to do well in the sector included David Jones, which ended up 11 cents, or 2.26 per cent, at $4.98 and Coles owner Wesfarmers, which rose 55 cents, or 1.65 per cent, to $33.83. Macquarie Private Wealth adviser Helen Spencer said retailers were boosted by the Reserve Bank of Australia's (RBA) decision to leave interest rates steady on Tuesday. The most traded stock by volume was Central Petroleum, with 88.17 million securities changing hands for $5.70 million. Central Petroleum ended down 2.2 cents, or 24.72 per cent, at 6.7 cents after the company released an exploration update on Wednesday. Preliminary market turnover was 2.75 billion securities worth $5.61 billion, with 743 stocks up, 363 down and 357 unchanged.

Australian dollar

The Australian dollar surged in Asia trading Wednesday, helped by strong equities and increased market expectations of possible quantitative easing in the U.S. Australian bonds fell on both ends of the curve as traders said there remained a strong likelihood of an interest rate hike from the Reserve Bank of Australia in November after the central bank surprised markets with a pause on Tuesday. Adding to recent calls for aggressive action from the Federal Reserve, Charles Evans, president of the Federal Reserve Bank of Chicago, told The Wall Street Journal overnight that the central bank should do much more monetary easing to spur economic growth. Those comments spurred big gains for the Australian dollar after the RBA's surprise decision weighed on the currency in Tuesday trading. Investor optimism about the potential for quantitative easing in the U.S. has been partly behind a more than month long rally in the Australian dollar, which is now close to its highest levels since the currency was floated in 1983. The Australian dollar was at $0.9714, up from $0.9579 Tuesday. Against the Japanese yen, the Australian dollar was at 80.76, from 80.205.