Best week in months for Australian shares

The local share market has closed higher for the seventh session of the past eight after more signs inflation has peaked in the United States, paving the way for less aggressive monetary tightening.

The benchmark S&P/ASX200 index on Friday had its highest close since December 1, gaining 47.7 points, or 0.66 per cent, to 7328.1.

For the week, the index gained 3.07 per cent in its best weekly performance since early November.

The broader All Ordinaries on Friday rose 50.2 points, or 0.67 per cent, to 7540.1, a 3.17 per cent gain for the week.

"It's a good week, isn't it? It looks like everybody's quite happy in the market now," IG market analyst Hebe Chen told AAP.

The gains came after a US consumer price index report released overnight showed inflation in the world's biggest economy dropped in December to its lowest level in more than a year.

Consumer prices rose 6.5 per cent in the past 12 months, in line with economists' expectations, showing the Federal Reserve's aggressive rate-hiking campaign to tame inflation has been paying off.

"Most importantly, I think people are starting to get convinced, to have more confidence that the central bank will start slowing down (rate hikes) and potentially cutting the interest rate by end of the year," Ms Chen said.

"That's the source of encouragement, for markets and traders," she said, adding that there was still the risk the narrative could shift as early as next week to the odds of a global recession as US earnings reports come in.

But on Friday, though, sentiment was positive with nine of the ASX's 11 sectors gaining ground. Energy was the biggest gainer, climbing 1.5 per cent as Brent crude rebounded to a one-week high of $US84 a barrel.

Woodside rose 1.2 per cent to $36.70, Santos added 2.4 per cent to $7.30 and Beach Energy closed up 0.9 per cent to $1.61.

Coalminer New Hope gained 5.1 per cent to $6.22 while Yancoal added 1.6 per cent to $6.20.

The heavyweight financial sector advanced 1.1 per cent, with gains for all the big banks.

NAB rose 1.6 per cent to $31.30, CBA gained 1.3 per cent to $106.50, Westpac climbed 1.1 per cent to $23.76 and ANZ added 1.0 per cent to $24.49.

In the mining sector, BHP had its highest close ever for a third straight day on surging iron ore and copper prices, gaining 0.5 per cent to $49.64.

Rio Tinto was up 0.9 per cent to a 10-month high of $122.29 but Fortescue dipped 0.5 per cent to $22.80.

Goldminer Northern Star was up 0.7 per cent to a nearly two-year high of $12.08 as the precious metal traded for just under $US1900 an ounce, its highest level since late April.

The consumer discretionary and consumer staples sectors went in different directions amid the risk-on mood, with the former up 1.4 per cent and the traditionally defensive staples sector down 0.5 per cent.

In staples, supermarket giant Woolworths dropped 1.1 per cent to $33.84, Coles fell 0.9 per cent to $16.69 and pub owner Endeavour Group fell 1.9 per cent to $6.30 amid talk of a pokies crackdown in NSW.

Meanwhile in the discretionary sector, Domino Pizza Enterprises gained 4.5 per cent to $71.80, Aristocrat Leisure climbed 3.9 per cent to $33.20 and Bunnings owner Wesfarmers rose 0.7 per cent to $48.15.

It was a quiet day for company announcements, but Life360 revealed it would reduce its workforce by 80 roles, or 14 per cent, in a bid to accelerate on its path to profitability.

Shares in the San Francisco-based owner of a namesake family tracking app and the Tile range of bluetooth tracking devices gained 11.1 per cent to $5.42.

The Australian dollar meanwhile was at about a six-month high against its US counterpart, buying 69.67 US cents, up from 69.09 US cents at Thursday's ASX close.

In cryptocurrency, Bitcoin was up 3.9 per cent to $US18,830 ($A27,000), and had earlier traded for as much as $US19,000 for the first time since the collapse of the exchange FTX in early November.


* The benchmark S&P/ASX200 index closed Friday up 47.7 points, or 0.66 per cent, to 7328.1.

* The broader All Ordinaries added 50.2 points, or 0.67 per cent, to 7540.1.


One Australian dollar buys:

* 69.67 US cents, from 69.09 US cents at Thursday's ASX close

* 89.74 Japanese yen, from 91.00 Japanese yen

* 64.24 Euro cents, from 64.20 Euro cents

* 57.11 British pence, from 56.91 pence

* 109.21 NZ cents, from 108.69 NZ cents.