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Australia: Shares hit record high on red hot iron ore prices

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Australian shares rode broad-based gains to a record peak on Tuesday, scaling past levels last seen before the global financial crisis as higher commodities powered miners.

[SYDNEY] Australian shares rode broad-based gains to a record peak on Tuesday, scaling past levels last seen before the global financial crisis as higher commodities powered miners.

The S&P/ASX 200 index firmed 0.3 per cent, or 19.3 points, to 6,845.1 at the close of trade, having touched an all-time high of 6,875.50 earlier in the session. The benchmark added 0.5 per cent on Monday.

The run to a new high comes despite uncertainties around the economy as investors focus on relatively cheap valuations and the prospect of policy stimulus, Shane Oliver, head of investment strategy and chief economist at AMP Capital, said.

Mining behemoths BHP Group and Rio Tinto Ltd , which have driven most of the benchmark's gains this year, firmed 0.6 per cent and 0.2 per cent, respectively.

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The gains were underpinned by a 3 per cent jump in Chinese iron ore futures, which boosted investor appetite for Australian miners.

The wider Australian mining sector advanced 0.7 per cent and has gained nearly 27 per cent this year, outperforming most of the other sectors on the benchmark.

However, the rally has also prompted some causes for concern, particularly as the market heads into earnings season.

"What does concern us is that certain parts of the Australian market look very aggressively priced," said Aaron Binsted, Portfolio Manager, Lazard Asset Management.

"We believe there is a bubble in some growth stocks and this is classic late cycle behaviour."

Across the Tasman Sea, New Zealand benchmark S&P/NZX 50 index ended the session 0.3 per cent or 27.59 points higher at 10,878.95.

Gains were dominated by local shares of Westpac Banking Corp , which climbed to their highest since May 22.

REUTERS