Shares closed the week higher with a strong performance on Friday by local banks, and as investors looked ahead to next week's US Federal Reserve board meeting, with suggestions the Fed may lower its 6.5 per cent threshold for unemployment and change its inflation target.
For the week, the benchmark S&P/ASX200 rose 70 points, or 1.4 per cent, at 5042 points, while the broader All Ordinaries rose 64.4 points, or 1.3 per cent, at 5023.8 points.
The ASX200 is now 5.1 per cent higher for the month of July, with markets pricing in another rate cut.
Reserve Bank governor Glenn Stevens will be speaking in Sydney on Tuesday to the Anika Foundation, but economists are doubtful he will give many clues about rate movements.
"We believe it is unlikely that there will be any comment in the speech on current monetary policy decisions, especially so close to the 6 August RBA board meeting," Commonwealth Bank economist Michael Workman said.
But eyes will be on the US next week, where a full board of economic data will be released, including home sales and prices, consumer confidence, and second quarter gross domestic product figures.
"All of them are likely to be interpreted through the QE3 tapering prism," Mr Workman said.
"[Next week's] Fed meeting may indicate that the September meeting will likely announce the start of the tapering of the Fed's $US85 billion per month asset purchases."
For the week, Rio Tinto rose $1.01, or 1.8 per cent, at $57.24, and BHP Billiton climbed 74¢, or 2.2 per cent, at $34.60, after the miner said it would spend $3.26 billion to build a seawater desalination plant at the Escondida mine in Chile.
But Fortescue Metals slipped 11¢, or 2.96 per cent, at $3.61, even though the iron ore miner said it was optimistic Chinese demand for steel would remain strong enough to keep the iron ore price well above $US100 a tonne.
Atlas Iron fell 2.5¢, or 2.9 per cent, at 85¢. The firm increased shipping volumes 16 per cent during the June quarter and expects to lift production further this financial year.
McMillan Shakespeare plummeted $5.56, or 36.2 per cent, at $9.80, after the finance group said the Rudd government's flagged changes to fringe benefit tax laws had created too much uncertainty.
Billabong International fell 1.5¢, or 3.8 per cent, at 38.5¢. The struggling surfwear retailer sold another of its brands and completed a $325 million bridge loan to pay off looming debts.
Incitec Pivot fell 7¢, or 2.5 per cent, at $2.70, after the explosives and fertiliser maker said it would take a $23 million hit as a result of the temporary closure of a Queensland ammonia plant.
Newcrest Mining rose $1.29, or 11.6 per cent, at $12.41, after the goldminer's production in the 2012-13 financial year met its lowered forecasts. The company said it expected an improvement in 2013-14.
Phosphagenics rose 0.5¢, or 4.6 per cent, at 11.5¢, after the company said its former chief executive was one of several staff who cheated the company of $5.7 million.
Perpetual slipped 1.5¢, or 3.6 per cent, at $39.51, as the wealth manager blamed a weaker equity market for the drop in funds under management during the June quarter.