The S&P/ASX200 rebounded by 67.7 points on Friday, up 0.79 per cent, to 8,682.1, as the broader All Ordinaries rose 60.3 points, or 0.69 per cent, to 8,854.7.
The final session took the leading index 0.2 per cent higher for the week, swinging high and low as traders digested a cash rate hike to 4.6 per cent, better-than-feared inflation numbers and a raft of unresolved market risks.
"The market has caught a gust of wind, but it's too early to say the sails have changed direction," Global X senior ETF strategist Marc Jocum said.
"It may get worse before it gets better."
Nine of 11 local sectors ended the day higher, led by IT stocks and energy, while real estate and health care lost ground.
The top-200 remains under pressure, shrinking 6.7 per cent since early August's all-time high after housing market fears sparked a banking sell off.
Miners followed in September as oil prices continued to soar as hopes for a timely end to the US-Iran war faded while the conflict broadened to new fronts.
The financials and raw materials sectors, which together account for almost three-fifths of the Australian stock market's value, are both in technical corrections — down more than 10 per cent from recent highs.
High interest rates will continue to cap the outlook for earnings and household spending, despite market bets on a back-to-back November rate hike easing during the week after dovish comments from Reserve Bank governor Michele Bullock.
However, some analysts were careful about taking forward guidance at face value.
"The RBA's communications over the past couple of years, and indeed during the pandemic hiking cycle, was always guiding the latest interest rate hike as being the last interest rate hike in the cycle, even though it never was," Moomoo market strategist Tapas Strickland told AAP.
Pressure on the banking sector was likely to continue, while segments carrying heavy debt loads such as infrastructure, real estate trusts and private credit also faced a tough third quarter.
"I think the Australian share market is going to struggle, especially for the next three months," Mr Strickland said.
"Those big global headwinds of oil and of high global yields, but also the domestic inflation backdrop as well."
The Australian dollar is buying 69.37 US cents, down from 69.53 US cents on Thursday at 5pm.
ON THE ASX:
* The S&P/ASX200 rose 67.7 points, or 0.79 per cent, to 8,682.1.
* The broader All Ordinaries gained 60.3 points, or 0.69 per cent, to 8,854.7.
One Australian dollar trades for:
* 69.37 US cents, from 69.53 US cents at 5pm AEST on Thursday
* 109.48 Japanese yen, from 109.95 Japanese yen
* 61.61 euro cents, from 61.43 euro cents
* 52.50 British pence, from 52.43 pence
* 123.60 NZ cents, from 123.69 NZ cents
