The Australian share market has closed higher after a wave of optimism swept the market on speculation Europe is about to embark on a huge round of stimulus in the bond market.

The benchmark S&P/ASX200 index closed 19.1 points higher, up 0.5% to 4,383.4, while the broader All Ordinaries index closed up 18.9 points, or 0.43%, at 4,410.8.

The market expects the European Central Bank (ECB) to begin a large bond purchase to lower bond yields, a move that would reduce financial pressures throughout the eurozone.

The speculation outweighed the release of the Reserve Bank of Australia’s meeting minutes, which suggested further interest rate cuts were unlikely in the current economic environment.