The Australian share market roared back to life Thursday after risk aversion in global equity markets moderated overnight and the local bourse broke above its 200 day moving average. Resources led broad-based gains after commodity prices surged. The benchmark S&P/ASX 200 closed up 62.7 points, or 1.3%, at 4756.4, after hitting a six day high of 4763.9. It was the biggest one day rise in four weeks and the first three day rise in six weeks. Share trading volume rose to a stronger-than-average A$5.9 billion. On the charts, the index broke above its 200-day moving average at 4716.0, suggesting the downtrend may be coming to an end.

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Overnight, Wall Street's S&P 500 rose 0.9% and London Metal Exchange copper rose 3.0% after Greece promised to double its fiscal savings this year. Wall Street was also encouraged by Federal Reserve minutes, which said the Fed's discussion of a stimulus exit strategy doesn't necessarily mean a policy tightening is imminent. A scale back on Glencore International's US$11 billion initial public offering Wednesday may have subsequently boosted commodities and resources equities.

BHP Billiton rose 1.2% to A$44.82, Rio Tinto rose 1.3% to A$81.10, Newcrest rose 2.3% to A$38.77, Fortescue Metals rose 1.6% to A$6.49 and OZ Minerals rose 5.2% to A$1.525. In the energy sector, Woodside Petroleum, Origin and Oil Search rose 1.8%-2.3%. Major banks rose 0.4%-1.8%, with Citi saying Moody's decision Wednesday to downgrade the long-term credit ratings of the big four Australian banks was only a minor negative. Brambles surged 3.9% to A$7.27 after reiterating guidance for its fiscal 2011 operating profit. Macquarie Equities reiterated its Outperform rating on the stock. But apart from short covering and strong demand in selected mid and large-cap resources, traders said the market lacked broad-based institutional demand.

The Australian dollar inched slightly higher Thursday, partly thanks to improved sentiment surrounding the fiscal position of neighbor New Zealand. Helping an early afternoon run in the Australian and New Zealand dollars, New Zealand unveiled a budget that targets a narrower deficit for the next fiscal year through deep spending cuts, setting it on course for a surplus by the year ending June 30, 2015. In response to the budget, Standard & Poor's Ratings Services said New Zealand's decisions don't affect its outlook on the country's sovereign debt.

The Australian dollar was changing hands at $1.0640, up from $1.0600 before the New Zealand budget and from $1.0623 late Wednesday. Against the Japanese yen, the Australian dollar was at 86.88, up from 86.235.

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