The Australian stock market finished over one per cent higher, led by gains in the mining and energy sectors, as investors took the previous day's decline as a buying opportunity.

The benchmark S&P/ASX200 index closed up 58.7 points, or 1.33 per cent, at 4,459.6 points, while the broader All Ordinaries index gained 58.5 points, or 1.32 per cent, to 4,480.9 points.

On the Sydney Futures Exchange, the September share price index contract was 72 points higher at 4,429 points, with 34,574 contracts traded.

BHP Billiton finished up 76 cents at $40.40, Rio Tinto closed $1.61 firmer at $71.43 and Fortescue Metals ended the session 12 cents stronger at $4.44. In the banking sector, Commonwealth Bank was up 78 cents at $51.48, Westpac was 31 cents higher at $22.52, National Australia Bank had added 13 cents to $23.87 and ANZ had put on eight cents at $22.18.

Making headlines on Friday, Africa focussed miner Equinox Minerals announced a return to profit, with higher copper production and lower costs in the first half of 2010. Its shares were up 15 cents, or 3.11 per cent, at $4.98.

Telstra shares were still suffering on Friday after the telco's weak profit results on Thursday. Its shares ended down two cents softer at $2.92, despite claims on Friday it had struck a deal to offload its interest in a Chinese property website for around 63 per cent more than it paid for it four years ago.

Brazil-focused nickel miner Mirabela Nickel says its output is improving despite slower than expected ramp-up speeds at its flagship Santa Rita operation, and it expects production at the very bottom of guidance. Mirabela shares were up seven cents, or 3.77 per cent, at $1.925.

In the retail space, Coles owner Wesfarmers was up 59 cents, or 1.94 per cent, at $30.96, Woolworths had gained 11 cents to $26.74 and Myer had advanced seven cents, or 1.92 per cent, to $3.71.

The spot price of gold was $1,216.80 per fine ounce, up $15.75 from Thursday's local close of $1,201.05. Gold miner Newcrest, which is slated to release its full year results on Monday, closed 85 cents, or 2.51 per cent, higher at $34.70, while its takeover target Lihir Gold was up 10 cents, or 2.38 per cent, at $4.31.

The most traded stock by volume was Telstra, with 206.43 million shares worth $597.1 million changing hands. Preliminary market turnover was 2.03 billion securities worth $5.7 billion, with 680 stocks up, 338 down and 316 unchanged.

The Australian dollar gained slightly Friday on the back of strong equities markets throughout Asia, particularly in Australia. Australian bonds were lower thanks to the strong stock performance, but still outperformed an overnight flood into U.S.

Treasurys as economic concern about the U.S. continues to grow. In a quieter session devoid of economic data in the region, most stock markets throughout Asia pushed higher. Australia was particularly robust, led by mining companies.

While traders were largely attributing the move to a solid start to earnings season in Australia, another factor may have been a federal election to be held on Aug. 21.

The Australian Labor Party and current Prime Minister Julia Gillard are engaged in a tight battle against Opposition leader Tony Abbott's Liberal National coalition, with another voter poll set to be released Sunday.

Given a belief Abbott would ditch a resources rent tax on the mining sector, traders were partly betting the upcoming poll could show a further narrowing of the gap.

Still, it wasn't just the Australian dollar moving higher with other commodity currencies, including the New Zealand and Canadian dollars gaining. The Australian dollar was quoted at $0.9021, up from $0.8974 late Thursday. Against the Japanese yen, the Australian dollar was at 77.65, from 76.59.