The Australian stock market closed at record highs today, boosted by a strong lead from United States markets, takeover activity and the central bank's decision not to lift interest rates.

"We had a very positive lead from overseas, and the Reserve Bank (of Australia) had the common sense not to increase rates until they have a look at the CPI (inflation) figures," Mr Chandler said.

He said retailer Coles Group and diversified industrial group Wesfarmers were amongst the biggest moving stocks after Wesfarmers last night proposed a $20 billion takeover of Coles.

At the 1615 AEST close, the benchmark S&P/ASX200 was 83.8 points, or 1.39 per cent, higher at a record 6097.2 - also a new intraday high - surpassing the previous record finish of 6036.1 set on February 23, 2007.

The all ordinaries also set new closing and intraday highs, closing 81.4 points, or 1.36 per cent, higher at 6079.0. That beat the prior closing record of 6009.3 also set on February 23, 2007.

On Wall Street overnight, the Dow Jones industrial average gained 128 points to 12,510.30 as lower oil prices calmed worries about inflation and news of rising home sales raised hopes that the US housing market was stabilising.

Natural gas pipeline owner APA Group improved eight cents to A$4.34 after it said it would buy Origin Energy network assets for A$556.5 million. Origin was was off three cents at A$8.85.

Among the major banks, the National Australia Bank stepped forward 50 cents to A$41.20, Westpac put on seven cents at A$26.17, the ANZ gained 19 cents to A$29.84 and the Commonwealth Bank found 67 cents at A$51.00.

In the media sector, Publishing and Broadcasting rose 36 cents to A$20.21 as it and investment bank Macquarie Bank teamed to buy one of the largest casino operators in western Canada. Macquarie Bank was A$1.69 better off at A$84.18.

Regional pay television company Austar was up 6.5 cents at A$1.695 after it said it had received confidential approaches from third parties about its ownership.

Commercial television broadcaster Seven Network gained 14 cents to A$11.47 as it bumped up its stake in West Australian Newspapers in a move sparked by the proclamation of new laws liberalising the ownership of Australian media businesses.

The top-traded stock by volume was gold and copper miner Oxiana, with 75 million shares worth A$221.17 million changing hands. Oxiana was up 21 cents at A$3.03.

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