The Australian market closed at a 20-month peak driven by strong gains for high yielding stocks.

At the close on Thursday, the benchmark S&P/ASX200 index was up 22.4 points, or 0.47% at 4,810.2, while the broader All Ordinaries index gained 21.7 points, or 0.45%, at 4,833.8.

The market closed at its highest level since May 2011.

On the ASX 24, the March share price index futures contract was 28 points higher at 4,781, with 21,108 contracts traded.

RBS Morgans private client adviser Bill Bishop said many investors were now looking at high yield stocks such as the major banks and Telstra because of Australia’s low interest rates.

“The low interest rates are driving some money out of bank deposits and into the stock market,” he said.

“There’s some offshore interest also.”

The four major banks all made gains on Thursday.

Commonwealth Bank jumped 57 cents to $63.24, National Australia Bank surged 34 cents to $27.09, Westpac gained 35 cents to $27.10 and ANZ added six cents to $26.00.

Telstra was up 1.11 per cent, or five cents, to $4.56.

However, the mining giants closed mixed.

BHP Billiton gained 10 cents to $37.16 but Fortescue lost three cents to $4.63 and Rio Tinto fell 16 cents to $66.29.

Women’s fashion retailer Noni B plunged 13.79% to 75 cents after it announced that its interim net profit would fall to between $1.7 million and $1.9 million from $2.4 million in the previous corresponding period.

US stocks closed higher on Wednesday buoyed by strong earnings results in the technology sector and progress in the Washington fiscal budget debate.

The Dow Jones Industrial Average rose 67.12 points (0.49%) to 13,779.33, its highest level since October 2007.

Locally, Sydney gold closed at $US1,678.80 per fine ounce, down $US13.55 from Wednesday’s close of $US1,692.35.

National turnover was 1.61 billion shares worth $3.919 billion, with 460 stocks up, 508 down and 334 unchanged.