The S&P/ASX200 rose 56.5 points, or 0.71 per cent, by the close, to 7999, while the broader All Ordinaries rose 58.4 points, or 0.72 per cent, to 8225.1.
The local bourse outperformed multiple rival indices, beating Wall Street's S&P500's 0.16 per cent rise overnight and was ahead of Japan's Nikkei index, which was down 0.01 per cent by 5pm AEDT, and Hong Kong's Hang Seng index, which was up 0.59 per cent.
A 0.1 per cent easing in monthly headline inflation steeled bets towards a Reserve Bank rate cut in May and the federal budget also had little effect on rate-cut forecasts.
Despite the short-term rally, investors needed to be nimble a week out from fresh US tariffs due on April 2, Pepperstone chief market strategist Chris Weston said.
"It feels hard to chase this market higher, because we are coming into what's going to be a very, very messy period of headline risk," he told AAP.
On the budget, Mr Weston said Australia's growth had been heavily dependent on government spending, which could lead to more economic fragility down the line.
"That would put a lot of heavy lifting on the RBA to support demand and lift consumption," he said.
Ten of 11 local sectors closed higher, helped by a 1.1 per cent gain in financials stocks, which have clawed back some of their downswing since big-four earnings disappointed investors in mid-February.
ANZ was the best performing bank, up 3 per cent, while CBA and Westpac gained more than 1.1 per cent each and NAB lifted 0.7 per cent.
Miners also pushed the bourse higher, with BHP, Rio Tinto and Fortescue all posting gains despite iron ore prices falling flat as record-high Chinese steel exports clashed with falling global production in January and February.
Industrials performed well, up 1.1 per cent with help from Qantas, which rose 3 per cent after announcing additions to its long-haul Airbus fleet.
Interest rate-dependent real estate was the best performing sector, up 1.2 per cent with Goodman Group, Stockland and GPT Group all rising more than 1 per cent.
Health care was the sole sector to finish in the red, led by a 1.5 per cent slump in biotech giant CSL after a dividend payout and some security rights came off the market.
The Australian dollar was slightly higher against the greenback at 63.13 US cents, up from 62.91 cents at 5pm on Tuesday.
ON THE ASX:
* The benchmark S&P/ASX200 index rose 56.5 points, or 0.71 per cent, to 7999 on Wednesday
* The broader All Ordinaries was down 58.4 points, or 0.72 per cent, to 8225.1
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 63.13 US cents, from 62.91 US cents at 5pm on Tuesday
* 95.01 Japanese yen, from 94.62 Japanese yen
* 58.55 euro cents, from 58.22 euro cents
* 48.84 British pence, from 48.68 British pence.
* 109.80 NZ cents, from 109.84 NZ cents
19°C