Australian shares ended higher on Friday as energy stocks advanced on higher oil prices following a U.S. airstrike in Iraq, with signs of growth in China adding to the gains.
Stocks, however, pulled back from session highs as the airstrike that killed a key Iranian personnel heightened geopolitical tensions.
Resources stocks recorded big gains, with energy shares <.AXEJ> rallying 1.7% to their highest in more than two weeks, as oil prices soared on concerns of a supply disruption following the airstrike. [O/R]
The S&P/ASX 200 index <.AXJO> closed 0.6% firmer at 6,733.5, after ending 0.1% higher on Thursday. The benchmark fell 1.3% this week to mark its first weekly loss in three.
Oil and gas major Woodside Petroleum Ltd <WPL.AX> ended 0.9% higher, while Oil Search Ltd <OSH.AX> jumped 3.2%.
Sentiment got a further boost after a private survey on Thursday revealed that Chinese production activity in December continued to grow and business confidence had strengthened, hinting at a recovery in the economy in the wake of a Phase 1 trade deal with the United States.
The Chinese central bank's decision to lower the amount of cash that all banks must hold as reserves in a bid to free up billons of dollars also lifted the mood.
Aussie miners <.AXMM> advanced 0.7% on firm iron ore prices. The sub-index declined 0.5% this week after three consecutive weekly gains.
Anglo-Australian miner BHP Group <BHP.AX> advanced 0.5% to post its best session in a week, while peer Rio Tinto <RIO.AX> rose 0.2%.
A rally of 1.9% in the gold index <.AXGD> also boosted the benchmark.
Heavyweight financial sub-index <.AXFJ> also added to gains as they rose 0.7%. All components of the 'Big Four' banks closed in the black.
Meanwhile, New Zealand's benchmark S&P/NZX 50 index <.NZ50> ended up 0.9% at 11,555.97 after markets resumed trade following two days of holidays.
Auckland International Airport Ltd <AIA.NZ> and Ryman Healthcare Ltd <RYM.NZ> underpinned the gains in the index.
The benchmark lost 0.1% for the week.
(Corrects paragraph three to say 'supply disruption', not 'supply glut')
(Reporting by Anushka Trivedi in Bengaluru, Editing by Sherry Jacob-Phillips)
