Shares began the week in a buoyant mood, helped along by blue chip Woolworths which posted its strongest day in almost 20 years after the supermarket owner announced a major operations overhaul.
The consumer staples sector led a broad rally on the index as most of the top 200 stocks ended the day with gains, with the exception of mining and energy stocks, which fell on the back of lower commodity prices.
The S&P/ASX 200 ended trade 0.6 per cent or 35 points higher to 5533.6, marking yet another 11-month high, while the broader All Ordinaries finished 0.6 per cent or 33 points higher to 5607.5.
Shares in the US also continue their record run, with the S&P 500 hitting a fresh high on Friday night, as the majority of companies reporting second quarter earnings in the US earnings continue to exceed the modest expectations set.
On the local index, the strongest stocks by weight, along with Woolworths, which rose 8.2 per cent to $24.30 on a $1 billion restructuring announcement, included the big four banks, all up around 0.5 per cent as they resumed their recent run of support.
Telstra shares rose 0.3 per cent to $5.82 following the announcement that chief operating officer Kate McKenzie would leave after nine years with the company. Her departure follows a series of costly network outages.
CSL rose 1.6 per cent to post a new record high of $120.96.
"[Monday was] certainly a strong day in the context of what's coming up," Patersons economist Tony Farnham said, noting key central bank meetings in the US and Japan, as well as Wednesday's local second quarter inflation data reading.
"Woollies got things going with its operational update, it was certainly a key driver of the moves in the index," he said.
Among the stocks trading lower, gold stocks fell, a casualty of a US dollar strengthened to its highest point in four months against a basket of major currencies in the lead up to Wednesday's US Federal Reserve meeting. Newcrest Mining was the weakest stock by market weight, falling 2.6 per cent to $23.42.
In a day light on data, regional shares flip-flopped ahead of both the Fed meeting and Friday's Bank of Japan meeting. The Nikkei 225 index turned a positive start into a flat finish, while the Shanghai Composite Index turned negative in late trade, down 0.3 per cent.
Stock Watch: Nintendo
Shares in Japanese computer game giant Nintendo took a steep dive on Monday, falling 17.7 per cent during trade after the company said on Friday the financial impact from the wildly popular PokémonGo app would be "limited". It came after shares in the consumer electronics company almost doubled following the release of the app in early July, adding more than $23 billion to the market cap of the Kyoto-based company.
On Monday, the stock fell almost to the 18 per cent limit allowed on the Tokyo Exchange. Investors had flooded into the stock, moved by the hype surrounding the augmented reality app, amid hopes the company had managed to finally catch up with the smartphone age. But Nintendo only has a 32 per cent stake in the Pokémon Company, and the company's management said they did not expect to revise its profit forecast.
Market movers
Woolworths
Shares in consumer staples giant Woolworths surged the most in almost 20 years on Monday after the company announced it would incur restructuring costs of almost $1 billion, saying it would transform its operating model, slash 500 jobs, slow its store roll out and close more than 30 underperforming stores. Woolworths shares surged 8.2 per cent, the biggest jump since October 1997 following the announcement, which brings total writedowns and charges under new chief executive Brad Banducci to around $4.2 billion, including the $3.2 billion impairment from the embattled Masters hardware chain.
US dollar
The Australian dollar posted a modest gain against the US dollar on Monday, but the Bloomberg Dollar Spot Index, a gauge of the US dollar versus 10 major peers, rose to 97.5, the highest level since March on Monday, sending precious metals including gold lower. The greenback has strengthened ahead of the US Federal Reserve statement on Wednesday, in which interest rates are expected to remain on hold but recent stronger economic data may inspire policymakers to change their language and leave stronger hints of a hike later this year.
Brent crude oil
Oil touched an almost two-month low on Monday after a stronger US dollar weighed on the commodities complex, while the Baker Hughes rig count showed the number of rigs in the US rose for the fourth week in a row by 14 to 371, leading to fresh concerns of a supply glut. Brent crude oil fell 0.2 per cent during the Asian trading session on Monday to $US45.61 a barrel, following a 3.8 per cent slide last week.
Japan
Exports in Japan fell less than expected in the month of June, with official data showing a 7.4 per cent year on year fall on a drop in car and steel shipments. The less than expected fall may allay concerns for policymakers which are widely expected to ramp up stimulus. The Bank of Japan meets on Friday. Despite the fall, volumes rose 2.9 per cent year on year including to China, the European Union and the US. The Nikkei 225 index pared its early gains in the afternoon session, trading flat despite beginning the day buoyant on stimulus hopes.
