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AAP

2013-02-28

The Australian share market has reached a fresh four and a half year high, buoyed by improved investor sentiment towards the Italian election outcome.

At the close on Thursday, the benchmark S&P/ASX200 index was up 67.5 points, or 1.34 per cent, at 5,104.1.

The index reached an intraday high of 5112.5 minutes before closing time, touching the highest level reached since September 2008.

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."

The big four banks benefited, 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 put on 17 cents to $30.20 and ANZ gained 44 cent to $28.72.

Supermarket giant Woolworths was closed 92 cents higher at $34.93 after announcing a first half net profit rise of 19 per cent to $1.15 billion.

Retailer Harvey Norman added 21 cents, or 9.21 per cent, to $2.49 despite a 36 per cent drop in half year profit from weaker sales and falling property values.

Mr Weston said the strong performance of the discretionary sector boosted investor confidence in Harvey Norman, as it forecast strong sales growth.

"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."

The spot price of gold in Sydney at 1620 AEDT was $US1,597.10 per fine ounce, down $US13.07 from Wednesday's local close of $US1,610.17 per ounce.

National turnover was 2.24 billion securities worth $7.13 billion, with 603 stocks up, 423 down and 352 steady.