The sharemarket has opened higher on expectations of an interest rate cut after the price of Australia's largest export, iron ore, fell to fresh lows.
The iron ore price dropped below $US50 a tonne overnight, extending a run of losses that began a week ago.
Iron ore for immediate delivery to the port of Tianjin in China fell to $US49 a tonne, from $US51, while iron ore at the port of Qingdao was $US49.53.
"That means things will be a lot tougher on the revenue front for Australia," IG markets strategist Stan Shamu said.
"It means a lot of domestic pressure and will probably force the RBA's hand to cut rates."
With the Reserve Bank's rate decision due next Tuesday, gains are primarily rising in the yield plays, Mr Shamu said.
"These are the banks, the likes of Telstra - all the stocks that pay good dividends are being rewarded by investors," he said.
The big banks were all stronger. Commonwealth Bank added 59 cents to $93.91, National Australia Bank was up 22 cents at $38.65, ANZ also gained 22 cents to $36.67 and Westpac was 17.5 cents stronger at $39.355.
Telstra was two cents higher at $6.35.
As the iron ore price continued to struggle, there was weakness in the materials space, Mr Shamu said.
BHP Billiton had shed 17 cents to $30.17, Rio Tinto was down 52 cents at $55.89 and iron ore pure play Fortescue Metals lost 6.5 cents to $1.83.
But the price of oil has rebounded, lifted by a report showing a decline in US crude production and a deadly explosion and fire on an oil platform in the Gulf of Mexico.
The US benchmark, West Texas Intermediate for May delivery, surged $US2.49 to close at $US50.09 a barrel on the New York Mercantile Exchange, snapping a three-day losing streak.
Woodside Petroleum was up three cents at $33.91 and Santos was 4.5 cents higher at $6.975.
Meanwhile, QBE jumped 36 cents to $13.15 as the insurance giant announced it was considering lifting its dividend payout ratio after returning to profitability in a $1 billion turnaround in February.
* At 1030 AEDT on Thursday, the benchmark S&P/ASX200 index was up 28.4 points, or 0.48 per cent at 5,889.2.
* The broader All Ordinaries index was up 27.7 points, or 0.47 per cent, at 5,860.6.
* The June share price index futures contract was 35 points higher at 5,883, with 6,825 contracts traded.
* National turnover was 348 million securities worth $863 million.