A second broad-based rally helped the ASX close the first week of 2022 slightly ahead, although the prospect of earlier rate hikes remains a worry for investors.
The market gained 1.29 per cent on Friday - a semi-recovery from Thursday's heavy losses caused by the warnings in the US Federal Reserve meeting minutes.
Energy and financials were the top performing shares in the latest session.
Energy shares gained more than two per cent. New Hope Corporation, Whitehaven Coal and Yancoal each gained a little more than three per cent.
Also helping energy shares was unrest in oil producer Kazakhstan and supply outages in Libya. The price of Brent oil rose to $US82.6 per barrel.
ANZ and the Commonwealth were best of the major banks. Each gained about 2.6 per cent.
Utilities and property were the next best improving categories.
The benchmark S&P/ASX200 index closed up 95 points, or 1.29 per cent, to 7453.3 points.
The All Ordinaries index closed higher by 95.1 points, or 1.24 per cent, to 7774.4 points.
For the week, the market inched higher by 0.12 per cent.
Looking ahead, US jobs figures for the first half of December are due and will be assessed by investors.
IG Markets analyst Kyle Rodda said wages growth would be the key measure of interest.
Higher wages would give more fuel for inflation and strengthen the case for earlier rate rises.
Mr Rodda said moderate wages growth could soothe investors' concerns.
Meanwhile, there was concerning news for Australia that national spending was at lockdown levels.
People in Sydney and Melbourne dragged down the week average as surging coronavirus infections keep them from going out.
On the ASX, private hospital operator Ramsay Health Care warned of a material impact from tighter restrictions on elective surgery in NSW and Victoria.
The two states have not given a date for when the restrictions may ease, due to coronavirus patients overwhelming hospitals.
Shares rose 0.89 per cent to $68.24.
Woolworths withdrew its bid for Australian Pharmaceutical Industries (API), leaving Wesfarmers as the only suitor.
Woolworths has examined the financial accounts of API but said it could not ensure the financial returns would meet those required by its capital allocation framework.
API shares were lower by 12.43 per cent to $1.51.
Woolworths was lower by 0.19 per cent to $37.36.
Wesfarmers was up 0.65 per cent to $58.46.
James Hardie shares dropped after the company sacked chief executive Jack Truong for "work-related interactions".
Director Harold Wiens has been named interim chief executive.
The company also raised earnings guidance for the financial year to March 31.
Shares were down 4.13 per cent to $51.54.
The big miners had a strong day after iron ore prices climbed. BHP gained 2.46 per cent to $43.73. Fortescue rose 3.14 per cent to $20.37. Rio Tinto was better by 2.39 per cent to $103.63.
The Australian dollar was buying 71.62 US cents at 1712 AEDT, lower from 71.73 US cents at Thursday's close.
ON THE ASX
* The benchmark S&P/ASX200 index closed up 95 points, or 1.29 per cent, to 7453.3 points on Friday.
* The All Ordinaries index closed higher by 95.1 points, or 1.24 per cent, to 7774.4 points.
* At 1712 AEDT, the SPI200 futures index was up by one point, or 0.01 per cent, at 7350 points.
One Australian dollar buys:
* 71.62 US cents, from 71.73 cents on Thursday
* 83.02 Japanese yen, from 83.07 yen
* 63.37 Euro cents, from 63.41 cents
* 52.86 British pence, from 52.99 pence
* 106.04 NZ cents, from 106.19 cents.