The S&P/ASX200 gained 16 points on Thursday, up 0.18 per cent, to 8,839, as the broader All Ordinaries rose 13.2 points, or 0.15 per cent, to 9,018.1.
Australia's leading index crumbled from a more than 100-point lead earlier in the day after June jobs numbers smashed expectations with employment rising by 76,300.
The surprise prompted interest rate markets to tip another hike before years-end, which would take the cash rate to 4.6 per cent.
"The ASX200 got out hard and early, up 103 points, hit that five week high of 8,926.3 and then after springing out of the gates, we ran into an electric fence in the shape of that red hot June's jobs report," IG analyst Tony Sycamore told AAP.
"And on top of that 26 per cent rise in oil prices we've seen this month, the RBA is definitely back with its hand hanging over the rate hike button for its August 11th board meeting."
Mining stocks charged for a third session as copper and gold stocks rallied on stronger commodity prices, while oil clung to recent gains as Iran-backed Houthis in Yemen claimed to strike two tankers in the Red Sea, stoking inflation fears.
The energy sector traded one per cent higher, led by uranium stocks as they recovered from recent weakness on the back of several positive production reports.
Refinery operators Viva and Ampol were flat by the close, while Woodside gained 0.5 per cent to $31.80, and Santos traded at break-even after its second quarter update failed to impress.
BHP shares improved 1.5 per cent to $60.63, while South32 added an extra 2.4 per cent on Thursday, taking its gains for the week to almost 20 per cent.
Gold stocks advanced despite the precious metal coming off the boil from its recent rebound to trade at $US4,123 ($A5,879) an ounce.
The heavyweight financials sector inched higher as NAB led the big four banks higher with a 1.3 per cent improvement to $39.81, while CommBank trailed the pack with a 0.4 per cent lift to $172.30.
In company news, Macquarie chief executive Shemara Wikramanayake announced her retirement after eight years in the top job, with banking and financial services boss Greg Ward to take over at the so-called "millionaire factory" in November.
Origin confirmed a significant data breach, after a third party accessed an unknown number of customers' personal data, including names, addresses, birth dates and incomplete credit card or bank details.
The Australian dollar is buying 70.05 US cents, up from 69.95 US cents on Wednesday at 5pm AEST.
ON THE ASX:
* The S&P/ASX200 rose 16 points, or 0.18 per cent, to 8,839
* The broader All Ordinaries gained 13.2 points, or 0.15 per cent, to 9,018.1
One Australian dollar trades for:
* 70.05 US cents, from 69.95 US cents at 5pm AEST on Wednesday
* 114.27 Japanese yen, from 114.11 Japanese yen
* 61.32 euro cents, from 61.30 euro cents
* 52.37 British pence, from 52.28 pence
* 120.50 NZ cents, from 120.20 NZ cents
6°C