The benchmark S&P/ASX200 on Wednesday finished up 33.8 points, or 0.35 per cent, to a one-week high of 7,753.7, while the broader All Ordinaries rose 25.2 points, or 0.32 per cent, to 8,020.9.
The mining sector was up 1.1 per cent after the federal budget unveiled Tuesday night included $7 billion in production tax credits for critical minerals and other incentives under Anthony Albanese's A Future Made in Australia plan.
BHP rose 2.2 per cent to $44.09, Fortescue gained 0.9 per cent to $26.03 and Rio Tinto added 1.1 per cent to $129.48.
The budget included income tax cuts, rental assistance and energy bill rebates, which Equity Trustees Asset Management investment specialist Grant Mundell said would be marginally positive for retail stocks.
"We think this will be spent on more non-discretionary/essential services," he said.
Pokies manufacturer Aristocrat Leisure climbed 2.0 per cent, clothing retailer Premier Investments grew 2.4 per cent and Adairs rose 1.3 per cent.
Overseas student placement provider IDP Education finished 7.1 per cent higher at $17 following five-straight days of losses, possibly on relief that a crackdown on foreign student visas wasn't more severe.
Pathology clinics were doing badly following the budget's promise to reform the sector, although the measures did include indexation of Medicare funding for certain pathology services.
Mr Mundell said a lack of indexation for general practitioners could mean more out-of-pocket costs for patients, resulting in a drop in volumes and fewer patients using downstream services.
Sonic Healthcare fell 3.4 per cent, its biggest drop in five weeks, while Healius retreated six per cent and Australian Clinical Labs finished 3.9 per cent lower.
The Big Four banks were mostly in the red, with ANZ dropping 1.2 per cent to $26.78, Westpac dipping 0.9 per cent to $26.36 and NAB losing 0.7 per cent to $33.75. CBA was the outlier, adding 0.5 per cent to $119.93.
Traders were also looking ahead to April's consumer price index figures from the United States, set to be released Wednesday night Australian time.
Producer price figures released overnight showed US wholesale inflation rose more than expected last month, but Fed chairman Jerome Powell called the readout more "mixed" than "hot" and reiterated an interest rate hike was unlikely.
The Australian Bureau of Statistics reported Wednesday wages grew 0.8 per cent in the March quarter, a tick under expectations, which NAB senior economist Taylor Nugent said supported the Reserve Bank's assessment wage pressure was past its peak.
But Betashares chief economist David Bassanese called the federal budget "surprisingly expansionist," which he said outweighed that benign wage data. He is predicting 40 per cent odds of another RBA rate hike, up only from 10 per cent before the budget announcement.
The Australian dollar was buying 66.42 US cents, from 66.05 US cents at Tuesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Wednesday finished 26.9 points, or 0.35 per cent, higher at 7,753.7
* The broader All Ordinaries rose 25.2 points, or 0.32 per cent, at 8,020.9.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.43 US cents, from 66.05 US cents at Tuesday's ASX close
* 103.84 Japanese yen, from 103.31 Japanese yen
* 61.34 Euro cents, from 61.21 Euro cents
* 52.75 British pence, from 52.62 pence
* 109.61 NZ cents, from 109.64 NZ cents.
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