The Australian share market has rallied in afternoon trading to finish higher, but will need to climb much further to dig itself out of recent heavy losses.
After closing at an 11-month low on Wednesday, the benchmark S&P/ASX200 index finished Thursday up 35.3 points, or 0.51 per cent, to 6,925.5.
The broader All Ordinaries gained 35.3 points, or 0.5 per cent, to 7,117.5.
"We've certainly had a better session today, that was courtesy of US yields retracting," IG market analyst Tony Sycamore told AAP.
US Treasury yields eased off their 16-year highs after a private labour market report by payroll processor ADP showed weaker-than-expected jobs growth last month, undercutting the case for higher interest rates.
Mr Sycamore noted a different US labour market report, the Job Openings and Labor Turnover Survey (JOLTS), earlier this week had reported the reverse, with more job openings than expected in August.
"The final decider will of course be non-farm payrolls," Mr Sycamore said.
That closely watched readout will be released close to midnight AEDT on Friday.
"The consensus expectation is that number should ease and if it does ease I think we've probably seen the high in yields and the low in equities," Mr Sycamore said.
"But if we get a hotter-than-expected number for payrolls on Friday, then it'll make for a very tricky opening on Monday morning for the local index.
"So at this point, I guess the way to look at it is that the storm clouds have cleared for the time being, but there is more potentially looming as soon as Friday night."
Eight of the ASX's 11 sectors finished higher on Thursday and three closed lower.
The interest-rate-sensitive real estate sector was the biggest mover, rising 2.2 per cent as warehouse owner Goodman Group added 2.6 per cent and Westfield owner Scentre Group 2.9 per cent.
The energy sector lost 0.9 p.er cent as Brent crude slid to a five-week low of $US86 a barrel following an Energy Information Administration report of buildup in US inventories.
Woodside fell 0.8 per cent to $34.31, Ampol fell 2.8 per cent to $31.98 and Viva Energy Group dropped 2.8 per cent to $2.78.
In the heavyweight mining sector, BHP was 0.7 per cent lower at $43.43 and Rio Tinto slid 1.5 per cent to $111.91, but goldminers were in the green as the price of the precious metal rebounded to $US1,824 an ounce.
Northern Star gained 4.7 per cent, Evolution rose 2.8 per cent and Newcrest added 1.8 per cent as Australia's largest goldminer announced it would pay a special dividend in a fortnight ahead of its pending acquisition by Newmont Corporation.
The Big Four banks all rose as well, with CBA adding 0.9 per cent to $98.98, Westpac rising 1.3 per cent to $21.01 and ANZ and NAB both advancing 0.7 per cent, to $25.09 and $28.51, respectively.
Back in the energy sector, Strike Energy climbed 11.5 per cent to a two-month high of 43.5c after announcing an appraisal well had extended estimates of the size of its South Erregulla gas field north of Perth.
In currency, the Australian dollar had rebounded against the greenback, after the exchange rate also fell to an 11-month low on Wednesday.
The Aussie was buying 63.57 US cents, from 63.05 US cents at Wednesday's ASX close.
ON THE ASX:
* The S&P/ASX200 index finished Thursday 35.3 points higher at 6,925.5, a gain of 0.51 per cent.
* The All Ordinaries rose 35.3 points, or 0.5 per cent, to 7,117.5
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 63.57 US cents, from 63.05 US cents at Wednesday's ASX close
* 94.52 Japanese yen, from 94.09 Japanese yen
* 60.49 Euro cents, from 60.29 Euro cents
* 52.33 British pence, from 52.31 British pence
* 107.09 NZ cents, from 107.15 NZ cents
