China's commerce ministry said Beijing and Washington are still discussing details of upcoming trade talks in October, and making preparations to ensure "positive progress" is made during the negotiations, stoking hopes that the two sides would find a way out of their near 15-month old trade war. The atmosphere around the trade spat also turned lighter after US President Donald Trump on Wednesday told reporters the two sides were having "good conversations" and that an agreement "could happen sooner than you think."
Since China is Australia's largest trading partner, domestic stocks are particularly sensitive to developments on the Sino-US trade front. "Markets are cautiously optimistic ... there are some signs the trade resolution could be certainly moving in the right direction," said James Tao, a market analyst at CommSec.
"There's no major indication that we are necessarily going to reach a deal or be closer to a deal, but that's just the market's interpretation of what we've seen from both sides." The energy index gained about 1% at close, hoisted by firmer oil prices over concerns of a Middle East conflict disrupting supply. Majors in the oil and gas space Woodside Petroleum and Santos Ltd each ended about 1% higher.
The technology and utility sub-indexes advanced more than 1% each. Energy infrastructure firm AusNet Services Ltd rose nearly 2%, while logistics software maker Wisetech Global closed 2.3% up. Australia and New Zealand Banking Group was top gainer among the "Big Four" lenders, which were all trading higher, helping the financial subindex rise about 0.5%. The broader mining index finished 0.3% higher, as iron ore prices extended Thursday's gains.
Bucking the trend, gold stocks dropped nearly 2% to their lowest since September 19 at close, with the bullion ending the week lower, as investors preferred the safety of the dollar in the wake of political uncertainties in the United States. Across the Tasman sea, New Zealand's benchmark S&P/NZX 50 index edged up 0.1%, or 13.7 points, to end at 10,836.50 boosted by energy and financial stocks. The index also logged in a weekly gain, closing about 0.1% higher, after two straight weeks in the red.