The sharemarket partially reversed its big sell-off with a solid finish after the Reserve Bank's positive comments about the economy.
The benchmark S&P/ASX 200 index closed up 38 points, or 0.76 per cent, at 5018.1 points today, while the broader All Ordinaries index rose 38.1 points, or 0.76 per cent, to 5036.7 points.
On the ASX 24, the March share price index futures contract was up 25 points at 4992 points, with 40,219 contracts traded.
The Australian sharemarket posted its largest one-day fall in nine months yesterday amid concerns about the strength of the US economic recovery that led to a sharp sell-off on Wall Street.
CMC Markets senior trader Tim Waterer said that despite weak overseas leads, the market bounced back after Reserve Bank of Australia governor Glenn Stevens' twice-yearly speech before the federal parliamentary economics committee.
Mr Stevens said the high dollar had helped offset the surge in investment in the mining industry, which would otherwise have led to higher interest rates.
"Australian investors appear to have dusted themselves off after the heavy fall on Thursday with the ASX 200 posting a comeback performance to end the week," Mr Waterer said.
"The relatively rosy tone conveyed by the RBA governor earlier in the day appeared to rub off on investors who recommenced the search for yield, with the banking stocks again helping to drive the local bourse higher."
Among the miners, BHP Billiton fell 30c to $36.87 and Rio Tinto fell 58c to $66.72. Fortescue rose 3c to $4.83.
Commonwealth Bank rose 74c to $65.55, National Australia Bank rose 40c to $29.82, Westpac rose 38c to $29.87 and ANZ rose 18c to $28.16.
Telstra was up 6c to $4.56 and Woolworths rose 42c, or 1.24 per cent, to $34.27.
Billabong shares fell 5c, or 5.49 per cent, to 86c after the troubled surfwear retailer announced a half-year loss of $536.6 million and downgraded its underlying earnings.
Oil and gas producer Santos impressed investors enough with positive outlooks for more cashflow from new liquefied natural gas projects to overshadow a fall in net profit, closing up 15c at $12.05.
Sims Metal Management was up 57c at $11.24 after narrowing its first-half loss and announcing the retirement of its chief executive.
National turnover was 1.88 billion securities worth $7.54 billion, with 581 up, 408 down and 367 unchanged.
