The sharemarket ended the week with a second straight gain after the central bank lifted its forecasts for economic growth.
The Reserve Bank of Australia revised its economic growth forecast for the year to December 2014 to between 2.25 per cent and 3.25 per cent, up from a range of two per cent to three per cent issued in forecasts in November.
IG market analyst Stan Shamu said there was a perception that the central bank now had a hawkish bias, despite earlier affirming a neutral stance on interest rates.
"With that in mind the market managed to push higher, and there's also a little bit of optimism that we'll see a further bounce back in the US non-farm payrolls number tonight after a disappointing December," Mr Shamu said.
"Also there has been a minor improvement in some of the emerging markets."
Non-farm payrolls data for January will include the latest unemployment rate for the US.
Locally, the resources sector drove most of the gains, with BHP Billiton up 52 cents at $36.09, Rio Tinto up 31 cents at $65.96 and iron ore miner Fortescue up 17 cents at $5.60.
Aurora Oil and Gas shares soared after it received a $1.8 billion takeover offer from Canada's Baytex Energy Corp worth $1.8 billion.
Its shares were up $1.47, or 56 per cent, at $4.09.
Shares in media group News Corporation gained $1.41, or 8.2 per cent, to $18.61 after it posted a better than expected second quarter profit of $US150 million, despite declining revenues from its Australian newspapers.
Among the banks, National Australia Bank added 15 cents to $32.78, ANZ gained two cents to $29.45, Commonwealth Bank lifted four cents to $73.52, while Westpac was 42 cents higher at $31.25.
- The benchmark S&P/ASX200 index added 35.1 points, or 0.68 per cent, to 5,166.5.
- The broader All Ordinaries index gained 37.1 points, or 0.72 per cent, to 5,184.5.
- The March share price index futures contract was 39 points higher at 5,121, with 25,952 contracts traded.
- The price of gold in Sydney was $US1,260.80 per fine ounce, up $US3.00 on Thursday's closing price of $US1257.80.
- National turnover was 2.04 billion securities worth $5.19 billion.