The sharemarket rebounded yesterday after two days of losses, as the dollar tumbled again and government bond yields also fell.
The benchmark S&P/ASX 200 closed up 0.3 per cent at 5180.8 after hitting an intraday high of 5194.9. However, on a weekly basis, the index fell 0.5 per cent, its first weekly fall in four weeks.
Trading volume was valued at $5.1 billion, well up on the 20-day moving average of $4.3bn.
BHP Billiton, Woodside Petroleum, News Corporation, Westfield Group, QBE Insurance, ResMed and Computershare rose between 0.5 per cent and 2.3 per cent as the dollar hit an 11-month low of US97.37c in Asian trading, down US1c, taking its fall this year to 6 per cent.
"A lower Aussie dollar helps the market and the economy," Goldman Sachs institutional dealer Richard Coppleson said.
There was also demand for high-yield stocks, with CBA, ANZ and Bank of Queensland rising 0.5-1.3 per cent.
The gains in high-yield stocks coincided with domestic 10-year bond yields falling eight basis points to 3.17 per cent after US 10-year bond yields also declined on weaker than expected US economic data.
Yesterday's top S&P/ASX 200 gainer was Virgin Australia, which rose 11 per cent after JPMorgan and UBS analysts raised their respective ratings on the airline to outperform and buy, from neutral. On Thursday, Virgin shares plunged 17 per cent after the airline issued a profit warning after the market had closed on Wednesday evening.
Iron ore miners also rose, with Rio Tinto, Fortescue Metals and Atlas Iron up between 1.1 per cent and 3.6 per cent despite spot iron ore slipping 1.1 per cent to a five-month low of $US125 a tonne.
Wesfarmers fell 2.9 per cent on a profit warning for its Target division. That put retailers under pressure, with JB Hi-Fi, Myer and David Jones down between 0.7 per cent and 2.9 per cent.
In the mining services sector, profit warnings continued, with Worley Parsons shares plunging 13 per cent after the company said its fiscal 2013 underlying net profit would fall to a range of $320 million to $340m as against its previous forecast that it would exceed fiscal 2012 profit of $345.6m.
Gold stocks remained weak, with Newcrest Mining down 2.3 per cent after spot gold fell 0.5 per cent to $US1385 an ounce.
Traders are now looking for signals next week in Federal Reserve chairman Ben Bernanke's testimony to the US Joint Economic Committee.
Despite concerns this week that better economic data could lead the Fed to "taper" its quantitative easing this year, Mr Bernanke was likely to reiterate support for quantitative easing as US inflation remained low and unemployment high, IG chief market strategist Chris Weston said.
