As Australian stocks power to fresh five-year highs, analysts say the country's benchmark index is set for further gains amid expectations for positive earnings over the next few weeks.
On Tuesday, stocks on the S&P ASX 200 hit a five-year high for the third consecutive session, trading around the 5,370 level mid-morning. Stocks are up 15.5 percent year to date, not far behind the S&P 500's 20 percent year-to-date gain on Wall Street.
Analysts say better economic data from Australia's major trading partner, China, coupled with the end of political uncertainty in the U.S., has helped boost sentiment. Furthermore, the election of a new Australian government in September brought an end to a prolonged period of political uncertainty and boost business confidence.
Although some analysts are starting to describe the market as overvalued, others say the good times are far from over, and strong earnings expectations combined with supportive macro-economic drivers are set to power the market even higher.