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Australia: Shares rally 1.6% ahead of Fed verdict

Australian shares bucked a poor performance by Wall Street to edge 0.6 per cent higher on Thursday, aided by a hunt for dividend yield and more merger action.

[SYDNEY] Australian shares ended 1.6 per cent higher on Wednesday led by a broad-based rally amid upbeat sentiment heading into this week's crucial meeting of the US Federal Reserve, which could deliver the first rate hike in nearly a decade.

The S&P/ASX 200 index rose 80.46 points to 5,098.90 at the close of trade. The benchmark tumbled 1.5 per cent to a three-week low on Tuesday.

Despite Wednesday's gains, the index is still down 5.8 per cent this year so far and is trading near mid-2013 levels.