The S&P/ASX 200 index broke through record levels yesterday, driven by a positive sentiment out of the US and a buoyant domestic resource sector.

 The index climbed 93.6 points or 1.5 per cent, to 6451.5, breaking the record close of 6422.3 set on July 24.

Global concerns about the state of the US home loans market and its impact on global economic growth had wiped as much as 12 per cent off the index following the last record high.

A decision by the US Federal Reserve to cut in its key interest rate by a greater than expected half-point, added to upward momentum last week.

Resource giant BHP Billiton, the world's largest mining company, led the way. Its shares leaped 5.2 per cent after market rumours that the group had struck gold at the world's largest mine in South Australia.

The big five banks also gained ground. St George climbed 2.5 per cent, NAB rose 2.4 per cent, both ANZ and CBA added 1.4 per cent and Westpac lifted 0.9 per cent.

Other financial services also made good ground with Babcock & Brown up 3.9 per cent, Challenger gaining 3.2 per cent, AXA up 2.5 per cent and Macquarie shares climbing 1.2 per cent.

According to the Merrill Lynch's Global Survey of Fund Managers for September, asset allocators show no sign of positioning their portfolios for a downturn.

"Investors say they are worried about business cycle risk, but asset allocators have yet to start reshaping their portfolios for a different environment," Merrill Lynch independent consultant David Bowers said. 

"This begs the question of whether they are in denial about the possible extent of this downturn."

A net 23 per cent of investors said they view equities as undervalued, a gain of 11 per cent from August, while a net 37 per cent of asset allocators went as far as to say they would increase their equities exposure, up from 29 per cent in August.