Investors sent the Australian stock market soaring for the second straight session in thin trade after a wildly volatile start to the financial year, as markets gained across Asia on an uptick in eurozone sentiment.
But gains were capped by investor caution ahead of a key US jobs report due overnight Friday that could put the possibility of a September start to US Federal Reserve stimulus tapering back in the spotlight.
At the 1615 AEST official market close, the benchmark S&P/ASX200 index lifted 0.98% to 4,841.7 points, while the broader All Ordinaries index added 0.95% to 4,826.4 points. Earlier, the benchmark touched a high of 4853.4 points.
IG market analyst Chris Weston said the benchmark had closed the week on a positive note after a tough start to the financial year.
"It’s good to see the bulls getting the upper hand, but we haven’t seen volatility and intra-day ranges like this for some time," he said.
"All sectors are higher today, although it has to be said volumes are shocking at $1.5 billion of value, with the year average at $5.2 billion; clearly the institutional side of the Australian broking world have had enough of the turbulent week."
Today's rise extends gains of almost 1.1% posted on Thursday, after a series of wild swings that saw the market post a 2.2% loss on Wednesday, a 2.6% rise on Tuesday and a fall of almost 2% on Monday, the first day of the new fiscal year.
CMC Markets premium client manager Niall King said the volatility marking the start to the financial year would continue into next week.
"Recent volatility looks set to continue into next week as market participants look to crucial economic releases both domestically and from China, to answer increasing questions about the health of the Australian economy and its largest trading partner," Mr King said.
Tim Waterer, also from CMC Markets, said renewed commitment from the European and London central banks to monetary easy was "music to the ears of investors" and should soften the blow if the key US non-farm payrolls report due overnight Friday proved disappointing.
"Traders were no doubt casting one eye towards tonight’s US jobs report, which could impact risk appetite heading into next week," he said.