Australian shares scale new high above 7,400 level, Fed decision awaited

Australian shares breached the 7,400 level for the first time ever on Wednesday as heavyweight financials and energy stocks advanced, while investors awaited the US Federal Reserve statement for clues on possible tapering of economic support.

The Fed is widely expected to acknowledge the first conversations among its policymakers about when and how fast to pare back the massive bond-buying programme launched in 2020 when it concludes the two-day policy meeting later in the day.

"The RBA (Reserve Bank of Australia) has practically hitched its wagon to the Fed policy over the last year... any Fed guideline on the tapering of bond purchases may signal the RBA to taper too," said Kyle Rodda, a market analyst at IG Markets.

The S&P/ASX 200 index closed 0.09% higher at 7,386.2 after scaling an all-time high of 7,406.2 earlier in the day.

Energy stocks were the top performers, jumping 1.5% as oil prices surged on improving demand outlook. Oil & gas explorers Woodside Petroleum Ltd and Oil Search Ltd surged 2.3% and 1.5%, respectively.

Financials were also higher. The so called "big four" banks gained between 0.1% and 1%, with top lender Commonwealth Bank of Australia scaling a new high of A$104.79.

Meanwhile, mining stocks slipped, weighed down by weak prices across metals. Global miner BHP Group Ltd and top gold producer Newcrest Mining Ltd fell 1.7% and 1.3%, respectively.

Shares of lithium miner Firefinch jumped over 25% after the company signed a deal with China's Ganfeng Lithium to jointly develop the Goulamina project in Mali.

In New Zealand, the benchmark S&P/NZX 50 index fell 0.9% to 12,581.6, dragged down by losses in utility and healthcare stocks.