Australian shares have staged a modest rebound after soaring bond yields, oil prices and a soft domestic outlook sparked a nearly $60 billion sell-off on Thursday.
The S&P/ASX200 rose 29 points by midday on Friday, or 0.34 per cent, to 8,643.4, as the broader All Ordinaries gained 26.3 points, or 0.3 per cent, to 8,820.7.
The dull bounce came as geopolitical risks continued to loom over markets, with Brent crude prices again topping $US102 a barrel on reports the US was deploying a third aircraft carrier to the Middle East, scuppering already shaky hopes for a US-Iran peace deal.
Despite Thursday's nearly two per cent plunge, the top-200 is only down 0.3 per cent for the week, on hopes the Reserve Bank won't opt for a back-to-back interest rate hike in November, after increasing the official cash rate to 4.6 per cent on Tuesday.
However, the Melbourne Cup Day meeting remains a live decision, and could bring further headaches for households and company earnings.
"Much will depend on the September quarter inflation result later this month, though the governor's press conference comments suggest a rate hike in November is not necessarily a done deal if the inflation outcome is on the high side," Betashares chief economist David Bassanese said.
"At this stage, however, my base case is that the RBA will hike again in November – to ensure a decent economic slowdown that helps lower inflation."
IT and energy stocks led nine of 11 local sectors higher on Friday in broad-based rallies as health care and real estate lost ground.
The heavyweight raw materials sector carved a 0.8 per cent gain, tracking with rebounds in BHP and Rio Tinto to $60.74 and $163.96 a share respectively.
Larger-cap gold miners advanced while smaller players and minnows shrank, as the precious metal eased slightly to $US4,149 ($A5,998) an ounce.
PLS Group was the best of the battery minerals producers, up 3.7 per cent, while Lynas Rare Earths inched 0.7 per cent higher after sliding on Thursday on announcing its acquisition of Australian-headquartered, Brazil-focused explorer Meteoric Resources.
A soft financials sector performance limited the upside for the local exchange, with CommBank the only big four player to advance, up 0.3 per cent to $150.12.
ANZ was the worst of its competitors, down 0.4 per cent to $37.04 as it ditched KPMG as its auditor after 57 years, while investment giant Macquarie tumbled 1.1 per cent.
In other company news, Lendlease shares dipped after the company extended the sale date of its MSG North development, noting several preconditions had not yet been satisfied.
The Australian dollar is buying 69.19 US cents, down from 69.53 US cents on Thursday at 5pm.
