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Aust share market closes 0.5% higher

The Australian share market closed half a percentage point higher as investors chased higher yielding financial stocks.

At the close on Friday, the benchmark S&P/ASX200 index was 25.0 points, or 0.52 per cent higher at 4,835.2, while the broader All Ordinaries index was up 25.1 points, or 0.52 per cent, at 4,858.9.

On the ASX 24, the March share price index futures contract was 23 points higher at 4,804, with 22,953 contracts traded.

IG Markets analyst Stan Shamu said investors had been drawn to high yielding financial stocks.

"It's all been about the defensive names, particularly the yield plays in the banking sector," Mr Shamu said.

Commonwealth Bank retested an all time high of $63.70 on Friday before closing at $63.59, up 0.55 per cent for the day.

Westpac closed 1.7 per cent higher at $27.55 and Macquarie was 2.5 per cent higher at $37.99.

NAB gained 0.55 per cent to $27.24 while ANZ firmed 0.3 per cent to $26.07.

"With downward pressure in interest rates everyone continues to chase that yield play."

Data released on Thursday showed that China's manufacturing activity had reached a two-year high.

On Wall Street overnight, the Dow Jones Industrial Average gained 0.33 per cent to 13,825.33 points.

On the local market womenswear retailer Specialty Fashion Group had soared 27 cents, or 38.57 per cent, to 97 cents.

The owner of the Katies and Millers chains says it expects its first-half profit to nearly triple due to cost savings and improved sales.

Sleep disorder specialist ResMed gained 30 cents, or seven per cent, at $4.58, after posting a 24 per cent increase in its second quarter net income, ahead of market expectations.

Construction giant Leighton Holdings advanced 92 cents to $20.00 after announcing its subsidiary Thiess had won a $175 million maintenance contract with Sydney Water.

In the resources sector, global miner BHP Billiton was six cents weaker at $37.10, and Rio Tinto shed 23 cents to $66.06.

Atlas Iron nudged up 0.5 per cent to $1.575 after meeting expectations with its second quarter production results.

Penrice Soda shares were flat as chairman David Trebeck launched an angry attack on dissident shareholder London City Equities (LCE) after he survived Australia's first two strikes board spill meeting.

National turnover was 1.9 billion shares worth $6.68 billion, with 541 stocks up, 456 down and 346 unchanged.

Locally, Sydney gold closed at $US1,669.18 per fine ounce, down $US9.62 from Thursday's close of $US1,678.80.