The S&P/ASX200 gained 91.5 points on Wednesday, up 1.03 per cent, to 8,990.9, as the broader All Ordinaries rose 90.5 points, or 0.98 per cent, to 9,299.
The top 200 ended the day within 30 points of its best-ever close of 9,019 on August 21.
Banking stocks' return to form came after after a strong start to US earnings season from some of its retail banks and as broader sentiment lifted on hopes of further interest rate cuts from the US federal Reserve, IG Markets analyst Tony Sycamore said.
"The backdrop is there in place and the local market has been in six or seven weeks of consolidation, working off those overbought readings and if we can get above those recent highs we should have a good run into year-end," he told AAP.
Nearly all 11 local sectors ended higher, led by the bounce in banking stocks and continued strength in the raw materials segment, which notched a record close for a second-straight session.
"That move in materials which started in late June just continues and I think the thematic that people want hard assets, commodities, critical minerals and the rest of it, it's certainly got some tailwinds behind it," Mr Sycamore said.
"And the valuations are still probably supportive of that sector moving higher."
Iron ore giants BHP, Rio Tinto and Fortescue each rallied more than 1.7 per cent and gold miners broadly rallied as the precious metal topped $US4,193 ($A6,437) an ounce for the first time, buoyed by safe haven inflows and dovish talk from the US Fed chair.
Evolution bucked the trend, slipping 2.9 per cent to $11.09 after its September quarter production missed expectations.
Energy stocks underperformed the broader market, slipping less than 0.1 per cent as oil hung at five-months lows as investors mulled oversupply and ongoing US-China trade tensions.
Uranium miners showed continued strength, with Paladin and Silex Systems each rallying more than three per cent, on the back of renewed focus on the commodity's strategic importance alongside rare earths elements this week.
Health care stocks hit their highest level since early September, as Telix Pharmaceutical shares rocketed more than 16 per cent after its revenue surged 53 per cent in the third quarter.
Defence technology stock Droneshield was the top 200's weakest performer, plummeting 9.6 per cent after a software launch couldn't stop stop investors from taking profit on one of 2025's biggest success stories.
In other company news, Commonwealth Bank chief executive Matt Comyn will likely steer CBA for at least another three years, chair Paul O'Malley told shareholders at the bank's annual general meeting.
Bank of Queensland shares rose 1.4 per cent to $7.22 after commercial lending growth helped lift its full-year profits, resulting in a bigger dividend for shareholders.
The competition watchdog announced a probe into Seven West Media's merger with Southern Cross media, but Seven's shares jumped 1.8 per cent while Southern Cross shares slipped 0.6 per cent.
Annual general meeting season continues, with Treasury Wine Estates, ARB, Aurizon and Stockland among companies set to front shareholders on Thursday.
The Australian Bureau of Statistics will release key jobs data in the morning which - along with the end of October's all-important quarterly inflation print - will guide the Reserve Bank's next interest rate decision.
"A lot of people are closing the doors on rate cuts and think we've seen the end of the easing cycle," Mr Sycamore said.
"But I also remember that the RBA have given people some horrible leads this year, so I'm not closing the door on a rate cut in November."
The Australian dollar is slightly stronger against the greenback, buying 65.12 US cents, up from 64.69 US cents on Tuesday at 5pm.
ON THE ASX:
* The S&P/ASX200 gained 91.5 points, or 1.03 per cent, to 8,990.9
* The broader All Ordinaries rose 90.5 points, or 0.98 per cent, to 9,299
CURRENCY SNAPSHOT:
One Australian dollar trades for:
* 65.12 US cents, from 64.69 US cents on Tuesday
* 98.43 Japanese yen, from 98.09 Japanese yen
* 56.04 euro cents, from 55.82 euro cents
* 48.77 British pence, from 48.50 British pence
* 113.92 NZ cents, from 113.48 NZ cents
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