The benchmark S&P/ASX200 index on Thursday was slightly lower all morning but turned things around in the afternoon to finish up 51.6 points, or 0.74 per cent, at 7,087.3.
The All Ordinaries gained 51.9 points, or 0.72 per cent, at 7,297.7.
For the month the ASX200 rose 4.52 per cent, breaking its three-month losing streak with its best monthly gain since January.
The index is now back in the green for the year, up 0.7 per cent.
"The general theme is that markets are getting really excited again about the Fed potentially cutting interest rates in 2024, and they're jumping onto the narrative from the Fed of a potential pivot," City Index market analyst Matt Simpson told AAP.
He attributed the afternoon rally to optimism about a potential drop in the Federal Reserve's preferred inflation measure, the Personal Consumption Index. Figures for October were set for release overnight.
End-of-month flows into the market might have also have had something to do with the late afternoon gains, Mr Simpson added.
Nine of the ASX's 11 sectors finished higher, with utilities and real estate the only areas in the red.
Industrials, financials and consumer staples all gained a bit more than one per cent.
The big four banks all gained ground, with CBA adding 1.3 per cent to $104.66, NAB adding 1.1 per cent to $28.40, Westpac growing 1.0 per cent to $21.37 and ANZ closing up 0.8 per cent to $24.37.
Iress was the biggest gainer in the ASX200, soaring 14.9 per cent to a three-month high of $7.03 after raising its full-year guidance by around $11 million.
The financial services software company said it now expected to make around $140 million in 2023/24.
Origin Energy dropped 1.9 per cent to $8.24 after the utility's board recommended against an alternative takeover offer by a Brookfield-led consortium.
Shareholders will vote on the original $16 billion proposal on Monday, with the outcome very much up in the air.
In the heavyweight mining sector, BHP gained 0.2 per cent to $46.30, Rio Tinto added 0.4 per cent to $125.04 and Fortescue rose 0.9 per cent to $24.99.
Sandfire Resources fell 1.9 per cent to $6.16 as the copper miner announced a review of geospatial data revealed "unregistered, low density artefact scatter" - the remains of past Indigenous inhabitation, generally stone or bones - had been disturbed at its shuttered DeGrussa mine in WA in 2017 and 2018.
Sandfire CEO Brendan Harris said Sandfire had engaged with the traditional owners to inform them and apologise.
Retail Food Group gained 8.9 per cent to 6.1c after the Gloria Jean's, Donut King and Crust Pizza franchise manager said it would buy Beefy's Pies, a Queensland-based family-owned business, for $10 million.
The Australian dollar was buying 66.49 US cents, from 66.39 US cents at Wednesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Thursday finished 52 points higher at 7,087.3, a gain of 0.74 per cent.
* The broader All Ordinaries closed up 51.9 points, or 0.72 per cent, at 7,297.7
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.49 US cents, from 66.39 US cents at Wednesday's ASX close
* 97.68 Japanese yen, from 97.73 Japanese yen
* 60.57 Euro cents, from 60.36 Euro cents
* 52.33 British pence, from 52.22 pence
* 107.64 NZ cents, from 107.34 NZ cents.
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