The local share market has rebounded from Wednesday's losses and then some, enjoying its best session in months after Australia's top central banker suggested the size of rate hikes had peaked.
The benchmark S&P/ASX200 on Thursday closed up 119.4 points to 6848.7, a 1.77 per cent gain that was the index's best performance since June 27.
The broader All Ordinaries rose 126 points, or 1.81 per cent, to 7085.3.
The ASX200 was already up around one per cent when Reserve Bank governor Philip Lowe hinted the RBA was considering slowing the pace of rate hikes after five months of rapid increases.
"Governor Lowe's comments today put a rocket under the share market," said Julia Lee, SPDR ETF equity investment strategist with State Street Global Advisors Australia.
"RBA has been front loading rate hikes but with rates now near neutral, it looks like the pace and speed of rate hikes looks to ease," she told AAP.
At the start of the week, the market had been pricing-in interest rates peaking this cycle at 3.75 per cent, Ms Lee said, but after Lowe's speech this fell to 3.5 per cent.
Still, Australia may be pulled along by global forces, Ms Lee added.
The Bank of Canada on Wednesday hiked rates by 75 basis points, the European Central Bank is poised to deliver another rate hike later on Thursday and the US Federal Reserve is expected to hike rates again in a few weeks.
"The RBA may be forced to continue to hike along with global counterparts to ensure (the Australian dollar) does not drop too hard," Ms Lee said. A lower Aussie dollar means Australians would have to pay more for imported goods, "effectively importing inflation".
Every ASX sector gained ground on Thursday except for energy, which fell 2.8 per cent as oil tumbled on fears of a global recession. Brent crude was down five per cent to $US88, its lowest level since early February.
Woodside Energy dropped 5.5 per cent to $32.10, in its biggest loss in two months. Santos declined 0.5 per cent to $7.77 while Beach Energy dropped two per cent to $1.65.
Elsewhere, the most substantial collective rise came from the tech sector, which gained 3.2 per cent.
Xero added 3.9 per cent and Sezzle climbed 6.2 per cent, while Tyro Payments soared 27.9 per cent to a four-month high of $1.26 after the EFTPOS machine provider announced it had rebuffed a $693 million tentative takeover by a private equity firm.
Tyro said the $1.27 per share figure floated by Sydney-based Potentia Capital Management "significantly undervalues" the company.
Data technology company Link Group gained 6.3 per cent to $4.58 after the Australian Competition and Consumer Commission announced it wouldn't oppose their acquisition by Canada's Dye and Durham.
But Electric Optic Systems plummeted by a third, to an eight-year low of 48c, after the defence contractor's delayed half-year results revealed an operating loss of $98.9 million.
The financial sector climbed 1.6 per cent, with all of the big banks in the green.
ANZ increased 2.8 per cent to $22.90, Westpac added 1.6 per cent to $29.62, CBA rose 1.2 per cent to $95.21 and NAB edged 1.1 per cent higher to $29.62.
In the heavyweight mining sector, BHP gained 1.8 per cent to $36.92, Rio Tinto rose 2.7 per cent to $91.86, and Fortescue Metals grew 4.9 per cent to $16.78.
Meanwhile the Australian dollar was buying 67.44 US cents, from 67.24 US cents at Wednesday's close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Thursday climbed 119.4 points to 6848.7, a 1.77 per cent rise.
* The broader All Ordinaries gained 126 points, or 1.81 per cent, to 7085.3.
One Australian dollar buys:
* 67.44 US cents, from 67.24 US cents at Wednesday's close
* 96.98 Japanese yen, from 96.84 yen
* 67.52 Euro cents, from 67.89 cents
* 58.67 British pence, from 58.50 pence
* 111.46 NZ cents, from 111.44 cents.