A resurgence in the mining sector will push the Australian sharemarket to new heights next year, fuelled by an improved outlook for corporate profits, according to fresh predictions from Morgan Stanley.

While the investment behemoth upped its forecast for the benchmark S&P/ASX 200 to finish next year at 8500 points, a surge in the sharemarket on Tuesday above 8400 had the gauge briefly within just 0.6 per cent of its 2025 projection. The broker previously tipped 8100.