The Australian share market held onto its early gains sparked by positive offshore leads to post its first weekly gain in three weeks. The benchmark S&P/ASX200 index was up 18 points, or 0.38 per cent, at 4,694.2, while the broader All Ordinaries index was up 18.3 points, or 0.38 per cent, at 4,780.1. On the ASX 24, the December share price index futures contract was 14 points higher at 4,705 points, with 31,328 contracts traded. The second consecutive day of gains came as risk appetite returned to the market. Investors were buoyed by positive economic data out of the United States and continuing developments in the European debt situation. The local bourse opened Friday's session higher after better than expected US home sales in October and retail sales in November pushed Wall Street to a second straight day of good gains. Resource stocks led the way, but weakness crept into several sectors throughout the afternoon, most notably the banks, as profit takers moved in ahead of the weekend.

The heavyweight resources stocks led the session, with BHP Billiton up 26 cents at $44.59 and Rio Tinto up $1.41, or 1.66 per cent, at $86.42. Rio on Friday signed an accord to set up a joint venture with state owned Aluminum Corporation of China (Chinalco) to explore for mineral deposits in the Asian nation. Worley Parsons added 80 cents, or 3.1 per cent, to $26.64 and Fortescue gained nine cents to $6.50. Gold miner Newcrest lifted 34 cents to $40.74, despite the spot price of gold in Sydney being $US1,390.40 per fine ounce, down $2.03 from Thursday's closing price of $1,392.43. The banks began to show weakness around noon after a stronger opening. Commonwealth Bank was the best performer, up 13 cents at $49.43, while National Australia Bank edged up two cents to $23.93. Westpac lost three cents to $21.93 and ANZ shed 11 cents to $23.31. Companies with exposure to the US housing market were among the market's best performers, most notably James Hardie, up 36 cents, or 6.16 per cent, at $6.2. Boral was also higher, adding 15 cents, or 3.21 per cent, to $4.82.

Elsewhere, Rolls-Royce has been blamed by authorities for the emergency landing of a Qantas A380 jet last month, a day after Qantas paved the way for legal action against the engine manufacturer if talks on costs prove ineffective. Qantas shares added five cents to $2.69, while Virgin Blue added one cent to 43 cents. David Jones is sticking to its financial guidance despite saying it was bracing for difficult trading conditions. Its shares lost three cents to $4.39. Satellite communications company Newsat was the top traded stock by volume with 70.5 million shares traded for a value of $427,486. Newsat shares closed steady at 0.6 cents. Preliminary national turnover was 2.05 billion shares worth $4.18 billion, with 574 closing higher, 529 lower and 375 unchanged.