The benchmark S&P/ASX200 index on Thursday finished up 37.6 points, or 0.52 per cent, to 7,236.8, while the broader All Ordinaries gained 37.6 points, or 0.51 per cent, to 7,426.9.
The ASX200 rose as many as 59.4 points in the first half-hour of trading on optimism over apparent progress overnight on talks to raise the US debt ceiling and avoid a cataclysmic default that could occur as soon as June 1.Â
But the gains then began losing steam, until the Australian Bureau of Statistics released the employment data a little before lunchtime.
The figures showed the unemployment rate rose to 3.7 per cent in April, compared to expectations of a 3.5 per cent, while jobs numbers fell by 4,300 rather than rising by 25,000 as expected.
"A second consecutive day of softer domestic data will likely be enough to keep a hawkish RBA from raising rates again when it meets in June," said IG Markets analyst Tony Sycamore in a note.
"The ASX200 will enjoy this."
The gains were the bourse's best in eight days, although they were not enough to make up for the past two days of losses.
Tech shares were the biggest winners, collectively rising 2.9 per cent after Kiwi cloud accounting platform Xero beat revenue and customer growth expectations in the first full-year results under new CEO Sukhinger Singh Cassidy.
Xero shares finished up 8.9 per cent at a 13-month high of $102.49.
The heavyweight mining sector also had a solid day, finishing up 1.2 per cent as the iron ore giants rebounded.
BHP finished up 1.2 per cent at $44.24 and Fortescue and Rio Tinto both added 1.4 per cent, to $20.53 and $109.98, respectively.
Goldminers were under pressure however as the precious metal slid under $US1,980 an ounce, its lowest levels since the start of the month. The safe haven asset may have lost a bit of lustre amid hopes for a resolution of the US debt-ceiling drama.
Newcrest dropped 1.0 per cent, Northern Star fell 1.3 per cent and Evolution retreated 0.5 per cent.
The big banks all finished higher, bolstered in part after a strong rally in US regional bank shares after Western Alliance Bancorp said its deposits had grown, easing fears of a wider crisis in US regional banking.
CBA grew 0.9 per cent to $98, NAB rose 0.8 per cent to $26.40, Westpac advanced 0.2 per cent to $20.96 and ANZ climbed 0.3 per cent to $23.64.
Elsewhere, Aristocrat Leisure fell 3.1 per cent to $38.04 despite the gaming company reporting its half-year net profit after tax rose 16.7 per cent to $619.1 million.
Word that the gaming giant was reducing its leverage and adopting a more conservative financial strategy led to S&P Global Ratings upgraded its rating on Aristocrat to investment grade, however.
KMD Brands climbed 1.0 per cent to $1.045 after the Kathmandu and Rip Curl owner said group sales were up 15.6 per cent in the three months to April 23.
The Australian dollar was buying 66.38 US cents, from 66.49 US cents at Wednesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished on Thursday up 37.6 points, or 0.52 per cent, to 7,236.8.
* The broader All Ordinaries added 37.7 points, or 0.51 per cent, to 7,427.0.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.38 US cents, from 66.49 US cents at Wednesday's ASX close
* 91.32 Japanese yen, from 90.98 Japanese yen
* 61.29 Euro cents, from 61.25 Euro cents
* 53.25 British pence, from 53.37 British pence
* 106.13 NZ cents, from 106.45 NZ cents
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