Aussie shares hit third all-time high in a week

The local share market has rallied to its third all-time high in a week after US economic data improved the prospects of the Federal Reserve cutting interest rates in December.

The benchmark S&P/ASX200 index on Tuesday finished up 47.3 points, or 0.56 per cent, to 8,495.2, while the broader All Ordinaries rose 49.7 points, or 0.57 per cent, to 8,754.7.

Tuesday's finish beat Monday's for the ASX200's highest ever close and in intraday trading the ASX200 also moved above 8,500 for the first time, reaching as high as 8,514.5.

IG analyst Tony Sycamore said the rally had been prompted by a surprise jump in a gauge of monthly US manufacturing data released overnight, which was followed by dovish comments by a Federal Reserve official seen as a key US rate-setter.

Fed governor Christopher Waller said based on the day's economic data, he was leaning toward supporting a rate cut at the central bank's meeting in two weeks.

Following those remarks the futures market's implied odds for a Fed rate cut in two weeks rose to 75 per cent, from 66 per cent a day previous, according to CME FedWatch.

Nine of the ASX's 11 sectors finished higher, while utilities dropped half a per cent and the materials/mining sector dropped marginally.

Health care was the biggest gainer, rising 1.2 per cent. Pro Medicus climbed 3.2 per cent, Ramsay Health Care grew 1.9 per cent and CSL added 1.4 per cent.

Metcash was the biggest gainer in the ASX200, rising 7.5 per cent to $3.43 after broker upgrades following the IGA supplier delivering better-than-expected half-year earnings on Monday.

The Star climbed 7.1 per cent to 22.5 cents after the cash-strapped casino operator said it had been able to draw down $100 million in debt from its new debt facility.

Zip fell 0.6 per cent to $3.41 after the buy now, pay later company announced its co-founder Larry Diamond would step down as a director and US chairman to focus on his philanthropic endeavours.

Collins Foods dropped 4.3 per cent to a two-month low of $8.25 after the KFC and Taco Bell franchisee said rising costs and flat sales meant its underlying half-year profit was down 23 per cent to $23.7 million.

Three of the big four banks were higher, with ANZ growing 1.1 per cent to $31.71, NAB adding 0.8 per cent to $39.60 and Westpac advancing 1.0 per cent to $33.61. CBA was the outlier, dipping 0.3 per cent to $157.78.

In the heavyweight mining sector, Fortescue climbed 2.1 per cent to $19.43, while Rio Tinto and BHP both dipped 0.2 per cent, to $119.05 and $40.66, respectively.

The Australian dollar was buying 64.75 US cents, from 65.01 US cents at Monday's ASX close.

ON THE ASX:

* The benchmark S&P/ASX200 index finished Tuesday up 47.3 points, or 0.56 per cent, at 8,495.2

* The broader All Ordinaries gained 49.7 points, or 0.57 per cent, to 8,754.7

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 64.75 US cents, from 65.01 US cents at Monday's ASX close

* 97.17 Japanese yen, from 97.85 Japanese yen

* 61.72 euro cents, from 61.76 euro cents

* 51.18 British pence, from 51.22 pence

* 110.11 NZ cents, from 110.18 NZ cents