The benchmark S&P/ASX200 index on Thursday finished up 103.8 points, or 1.23 per cent, to 8,520.7, while the broader All Ordinaries gained 101.7 points, or 1.17 per cent, to 8,785.1.
Between Wednesday and Thursday's gains, the ASX200 is just 11.6 points shy of recouping all of Monday's sharp 1.8 per cent plunge and returning to record territory.
"The ASX200 continues to dust itself off and reclaim the losses sustained following the Trump trade war shock from earlier in the week," wrote Capital.com analyst Kyle Rodda.
Overnight a gauge of activity in the US service sector came in softer than expected for January, which was seen as slightly increasing the odds that the Federal Reserve would cut rates by June.
NVIDIA shares meanwhile gained 5.4 per cent after Google parent company Alphabet said it would spend $US75 billion on capital expenditures in 2025, more than analysts expected.
Ten of the ASX's 11 sectors finished higher, with energy dropping 0.3 per cent
The consumer discretionary sector was the biggest gainer, rising 1.9 per cent as Kmart owner Wesfarmers surged 3.2 per cent to $77.06.
News Corp's ASX-listed shares gained 5.8 per cent to $56.28 after the media giant posted $2.24 billion in revenue in the three months to December 31, up five per cent from a year earlier.
"This is a strong result," E&P analyst Entcho Raykovski said.
All of the big four banks were sharply higher, with ANZ and CBA both gaining 2.6 per cent, to $30.95 and $162.64, respectively, while Westpac climbed 2.2 per cent to $34 and NAB advanced 2.5 per cent to $40.38.
In the heavyweight mining sector, Fortescue rose 2.0 per cent to $1936, Rio Tinto added 0.8 per cent to $120.18, while BHP grew 0.3 per cent to $40.26.
The Australian dollar was at a one-week high against its US counterpart, buying 62.68 US cents, from 62.50 US cents at 5pm on Wednesday.
ON THE ASX:
* The benchmark S&P/ASX200 index on Thursday rose 103.8 points, or 1.23 per cent, to 8,520.7
* The broader All Ordinaries gained 101.7 points, or 1.17 per cent, at 8,785.1
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 62.68 US cents, from 62.50 US cents at 5pm AEDT on Wednesday
* 95.56 Japanese yen, from 95.87 yen
* 60.34 euro cents, from 60.23 euro cents
* 50.20 British pence, from 50.13 pence
* 110.64 NZ cents, from 110.52 NZ cents
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