Stocks rallied to levels not seen since 2008 this week after the US Congress approved an 11th-hour deal to lift the US government borrowing limit and end a partial government shutdown.
The resolution to the US debt crisis also boosted gold prices and the Australian dollar, helping gold miners but not the US dollar-exposed resource companies.
The local bourse enjoyed a large kick on Friday from news that China, the world's second biggest economy, grew by 7.8 per cent in the year to September.
For the week, the benchmark S&P/ASX200 index jumped 90.6 points, or 1.7 per cent, at 5321.5 points, while the broader All Ordinaries index jumped 92.2 points, or 1.8 per cent, at 5321 points.
The US debt ceiling deadline had been ticking down for weeks while concern about missing the deadline had been increasing.
So when Republicans and Democrats fashioned a last-minute political truce on Wednesday - effectively pushing the deadline back by a few months - global markets rallied strongly. The S&P 500 surged to a record high, helping the local bourse to hit its highest level in almost five and a half years.
Shareholder confidence behind the rally was reflected in the Australian Securities Exchange's VIX Index - which gauges investor sentiment, which closed at 12.349 - the lowest level this month, and a relatively low value historically.
Financial markets had been expecting US politicians to cobble together a last-minute deal.
In the early hours of Friday morning, Australia's dollar hit a fresh four-month high US96.48¢ thanks to US dollar weakness after US budget legislation was passed on Thursday, Easy Forex currency dealer Tony Darvall said.
"We're looking pretty strong here," he said. "Some people are saying it could be mid-2014 before the Fed tapers and the whole US dollar weakness theme could be a major trend, and that could get the Aussie dollar up to US98¢ or US99¢, even parity has been talked about by a few traders."
A weaker US dollar helped gold miner Newcrest, which gained 54¢, or 5.3 per cent, to close at $10.68.
The big miners didn't fare as well, BHP Billiton losing 5¢ to $35.75 while Rio Tinto shed 26¢ to $63.45. Other companies exposed to the US dollar also fell, including insurer QBE, down 19¢ to $14.59, and healthcare group ResMed, losing 6¢ to $5.79.
For the week, Warrnambool Cheese and Butter gained 62¢, or 8.5 per cent, at $7.89, while Bega Cheese rose 6¢, or 1.6 per cent, at $3.88, after diary co-operative Murray Goulburn entered the takeover battle for WCB, trumping rival bidders Bega Cheese and Saputo with a $420 million offer.
Fortescue Metals rose 30¢, or 6 per cent, at $5.30, after the iron ore miner said its expansion project was all but complete and it was ready to start paying off its $12 billion debt.
Newcrest Mining gained 18¢, or 1.7 per cent, at $10.68. The embattled miner beat its own expectations on quarterly gold production and costs, but has conceded ground to the tax office and will take a $120 million hit to resolve a dispute.
Oz Minerals dropped 65¢, or 14.8 per cent, at $3.75, after it said it hadn't achieved its expected production levels of gold and copper at its Malu open pit in South Australia.
Rio Tinto rose $1.87, or 3 per cent, at $63.45. The global miner said it was confident of hitting this year's iron ore production target of 265 million tonnes subject to weather conditions.
Cochlear slipped $2.56, or 4.2 per cent, at $58.08, after the hearing implant maker said it expected profit to be flat this financial year.
CSL rose $2.47, or 3.8 per cent, at $68.42. The Blood products and vaccines maker is embarking on a share buyback worth almost $1 billion as it flags a slowdown in profit growth.