Australia's key share index is poised to rise through the symbolic 5000-point mark within days, a move likely to stoke confidence further that the financial crisis is over.

The S&P/ASX 200 index of the top 200 Australian companies has risen another 1 per cent today to trade recently at 4879.4 points, just over 2 per cent shy of the 5000 mark last touch a year ago. The broader All Ordinaries index is similarly well-placed to reach 5000 in coming days, trading recently at 4881.8 points.

Overnight, the Dow Jones Industrial Average of 30 leading US companies closed above the psychologically important 10,000 mark - the first time for the Wall Street index since October 3, 2008 - prompting cheers by traders.

''We're in a bit of sweet spot at the moment where the stimulus measures have obviously cut into the economy quite nicely and are producing an environment that is share market-friendly,'' said CMC Markets analyst David Taylor.

Australian assets have drawn international investors in recent months as the underlying economy out-performed gloomy expectations and virtually all other developed nations by avoiding a recession.

"I’m very confident we’ll finish the year through 5000 and a couple hundred points over 5000," said Burrell Stockbroking associate Peter Wright. "There’s nothing to dissuade me from that kind of view."

Echoing RBA governor Glenn Stevens’ view about the economy, Mr Wright said that since the financial crisis hit, Australian monetary policy has been "on disaster settings…without a disaster".

"The reality of the economic figures are underwhelming but a long way short of the disaster we were looking at a year ago," he said.

The Reserve Bank also became the first central bank among the G-20 group of nations to raise interest rates when it moved last week. Governor Glenn Stevens signalled today that more rises are ahead, comments that sent the Australian dollar to fresh 14-month highs of almost 92 US cents.

The ASX 200 index hasn't been above 5000 points since the end of August 2008, just before the collapse of US investment bank Lehman Brothers. The index has risen 31 per cent in 2009 - and about 70 per cent when currency adjustments take the Aussie dollar's rise into account.

Global shares markets have been spurred by optimism for the recovery of the world's economy, led in large part by a quicker-than-expected rebound in China. Australia's reliance on China - both as its biggest export market, but also the effect Chinese demand has had on international commodity prices - has helped it avoid a much sharper slowdown than predicted.

Last month the jobless rate dropped to 5.7 per cent from 5.8 per cent where it had been for three months running, fuelling hopes that the peak of unemployment in Australia may have passed, and sparking a run-up in share prices. From their nadir in March, the ASX 200 has climbed about 55 per cent to date.

Apart from the landmark 5000-point mark, some investors are also looking forward to another symbolic milestone - parity between the US and Australian dollar.

The Aussie dollar flirted with the $1-$US1 conversion rate in the middle of 2008 as commodity prices boom. It then slumped to a low of 61.17 US cents on October 27, 2008 as fears of a global financial crisis peaked. Since then the local dollar has rallied although part of the gains have come as a result of the slumping US currency.
 
czappone@fairfax.com.au
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