The Australian share market has rallied to its highest level in five months on signs that US inflation is finally cooling.
The benchmark S&P/ASX200 index on Friday finished up 194 points, or 2.79 per cent, to 7158, while the broader All Ordinaries gained 204.4 points, or 2.86 per cent, to 7350.1.
"Huge day - the world turned green," said CMC Markets analyst Azeem Sheriff.
It was the second-best day for the ASX200 in the past two and a half years, behind a 3.75 per cent, 242.4-point rally early last month.
The gains came after a big day on Wall Street, which enjoyed an even stronger session on news that US inflation, while still high, had moderated in October.
"Last night's weaker-than-expected US CPI outcome is rightfully good news for markets and helps re-widen somewhat the 'narrow path' ahead for the US to avoid recession," Betashares chief economist David Bassanese said in a note.
He said the numbers cemented the case for the US Federal Reserve to moderate its campaign of rate hikes, which have pushed US interest rates to their highest levels since 2008, making equities look comparatively less attractive.
Mr Sheriff said it was hard to say whether this was the start of a bull market, or just another bear market rally.
"It's just one reading. I mean, it was a good CPI, but I think what people want to see is more consistency. I think what people want to see is maybe two months or three months of the core CPI starting to come down," he said.
"Then they can be a bit more confident that those rate hikes are starting to kick in, the gears are starting to turn, and we might be in a much better situation than we anticipated.
"Then maybe what the Fed, what central banks are saying about (interest rates being) 'higher for longer' may not necessarily be the base case."
The prospect of the US rate-hiking campaign moderating also caused the US dollar to fall, boosting commodities as well as the Australian dollar, which hit a seven-week high against the greenback.
Every ASX sector on Friday gained ground except utilities, which had a double-digit rally on Thursday on a private equity firm's takeover overtures towards Origin Energy.
Tech stocks were the biggest gainers, climbing 5.0 per cent as Afterpay owner Block gained 11.5 per cent and Wisetech Global soared 10.4 per cent.
The interest rate sensitive property sector climbed 4.1 per cent, with warehouse owner Goodman Group gaining 6.0 per cent and Stockland rising 4.2 per cent.
In the mining sector, lithium producers IGO, Core Lithium and Allkem all closed at all-time highs after rising from 2.0 to 4.3 per cent.
BHP rose 3.8 per cent to a three-month high of $42.09, Fortescue Metals added 5.8 per cent to a nearly two-month high of $17.76, and Rio Tinto was up 4.4 per cent to a four-month high of $102.63.
Goldminers gained ground as the price of the precious metal rose to $US1,758, its highest level since August. Newcrest added 3.5 per cent, Northern Star gained 3.3 and Evolution was up 7.4 per cent.
The big banks all had a solid day, with Westpac up 2.0 per cent to $24.08, CBA climbing 1.7 per cent to $105.81, NAB adding 1.1 per cent to $31.35 and ANZ up 1.5 per cent to $24.64.
Ramsay Health Care rose 4.7 per cent to a six-month high of $61.85 after the global hospital network said activity levels improved across all regions in the first quarter as COVID-19 cases declined.
Ramsay estimated that COVID cost it $5.9 million in September, down from $44m in July.
Accent Group was up 12 per cent to $1.685 as the Platypus, Hype DC and Skechers brand owner announced that sales were up 52 per cent in the first quarter compared with a year ago, with higher gross margins as well.
"We are very pleased to trade to date, which has been above expectations," chief executive Daniel Agostinelli said.
For the week the ASX200 gained 3.8 per cent, its third straight winning week and second-best weekly performance in the past two years.
The Australian dollar was buying 66.30 US cents, from 64.16 US cents at Thursday's close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Friday gained 194 points to 7158, a 2.79 per cent rise.
* The broader All Ordinaries climbed 204.4 points, or 2.86 per cent, to 7350.1.
One Australian dollar buys:
* 64.16 US cents, from 64.16 US cents at Thursday's close
* 93.93 Japanese yen, from 93.78 yen
* 63.98 Euro cents, from 63.98 euro cents
* 56.66 British pence, from 56.32 pence
* 110.22 NZ cents, from 109.23 NZ cents