Upbeat investors pushed ASX higher, with analysts saying there’s ‘irrational optimism’

The Australian stock market has finished higher amid buoyant commodity prices and a degree of “irrational optimism” among investors.

The Australian Stock Exchange All Ordinaries closed higher.

The Australian share market closed almost 2 per cent higher after rallies in the US and Europe overnight, and as commodity prices remain strong.

The S&P/ASX200 finished 1.88 per cent higher at 6037.6 on Tuesday while the All Ordinaries Index gained 1.86 per cent to 6166.5.

CommSec chief economist Craig James told NCA NewsWire it was encouraging after seeing the local market tread water for the past fortnight.

“We’re holding onto the gains — the fact that investors remain so upbeat is quite amazing,” Mr James said.

“It’s green across the screen.

“Investors are seeing the world glass half full rather than empty.”

Mr James said there was a “degree of irrational optimism” but the strong overseas leads were a good basis for the rise.

Standout performers included stem cell therapy company Mesoblast, which is working on a potential treatment for respiratory distress caused by COVID-19, up more than 7 per cent to $4.12.

Pokies manufacturer Aristocrat Leisure surged almost 7 per cent to $27.60, while buy-now-pay-later technology company Afterpay put on 6.47 per cent to $70.80.

Declines included property giant Unibail-Rodamco-Westfield, which has a large portfolio of shopping centres, down 3.05 per cent to $3.50.

Among the big banks, Commonwealth Bank gained the most with a rise of 2.25 per cent to $71.50, while National Australia Bank put on the least, up 1.18 per cent at $17.14.

Rio Tinto gained 2.04 per cent to $105.10 while fellow mining giant BHP Billiton lifted 1.55 per cent to $37.92.

Diversified conglomerate Wesfarmers finished 0.85 per cent higher at $46.29 while the national carrier Qantas closed up 1.88 per cent at $3.26.

The Aussie dollar was fetching 71.37 US cents, 54.54 British pence and 60.62 Euro cents at 5.10pm AEST.