Shares rallied off early losses to send the benchmark top 200 index to new 2016 highs and within a whisker of 5700 points, as strength in resources names and the big banks outweighed losses in listed property and utility sectors.
A poor lead from Wall St made for a difficult start to the second last trading session for the year, made even trickier as a host of listed trusts traded without the rights to their shareholder payouts.
Weighing were big names such as property developer Stockland, which fell 2.6 per cent, and DEXUS Property Group, which dropped 3.3 per cent. Also trading ex-distribution, were pipeline operator APA Group, which fell 2.6 per cent,and Sydney Airport and toll road operator Transurban, which lost 1.3 per cent and 2.4 per cent, respectively.
But after trading in the red in initial light, holiday-season trade, by late morning buying in resources names and the major banks, followed by a flurry of late interest, helped the S&P;/ASX 200 index rally to finish up 14 points, or 0.2 per cent, at 5699 points.
National Australia Bank was the best of the big four lenders, adding 1.1 per cent, while ANZ Banking Group climbed 0.8 per cent, Westpac a more modest 0.3 per cent, while Commonwealth Bank 0.2 per cent.
Iron ore pushed higher on Wednesday night to $US80.68/tonne, up $US1.26 and back within striking distance of its recent high of $US83.58. Brent oil remained largely steady at $US56.24/barrel on Thursday and at near 17-month highs as traders remain confident that the first OPEC production cut since 2008, and the first collaboration with Russia and other non-members for 15 years, will support crude prices into 2017.
Those commodity moves lifted the likes of miners Rio Tinto and Fortescue Metals Group, which added 0.9 per cent and 0.3 per cent, respectively, although South32 eased 0.7 per cent. BHP Billiton gained 0.2 per cent, as did Woodside Petroleum, while and Origin Energy and Oil Search 1.4 per cent and 1.6 per cent, respectively.
Gold miners were the best performers on the ASX as the precious metal, after a torrid number of months, continued to edge higher in the final days of the year to add a further 0.6 per cent to $US1148.84/ounce. Newcrest Mining lifted 3.4 per cent, while the likes of St Barbara, Evolution Mining and Northern Star Resources all made even stronger gains.
Supported by robust commodity prices and as the greenback gave up some of its recent strength, the Aussie dollar managed to lift a fifth of a US cent to just above US72¢ in late Thursday trade.
Looking beyond near-term ups and downs, the coming year "should still be a good one for the US dollar," BK Asset Management currency strategist Kathy Lien suggested, which should place further downward pressure on the local currency.
Ms Lien pointed to the Federal Reserve's flagged intention to raise rates three times in 2017 as just one factor set to underwrite greenback strength.
"Between Donald's Trump Presidential victory, the surge in US rates and record highs in US stocks, global investors have found plenty of reasons to want to own US assets and in turn the US dollar," she said.
"The moves that we have seen so far are in line with the market's reaction to Ronald Regan's election in 1980 and if Trump follows through we could see an even stronger rally for the dollar in 2017. Fiscal stimulus and rate hikes are a powerful combination but our positive dollar view is predicated on Mr Trump delivering.
"In other words 2017 should be a good year for the US dollar unless Donald Trump fails to deliver and the Fed resorts to raising interest rates only two instead of three times next year."
Around the region on Thursday, Japan's benchmark Nikkei sharemarket index was down 1.4 per cent in late trade to a more than two-week low as Toshiba Corp continued to worry investors.
The iconic Japanese company's stock plunged by as much as 26 per cent on Thursday after rating agencies cut the company's credit ratings. On Tuesday morning Toshiba warned it could face "several billion dollars" of impairment losses related to its US nuclear business. The stock has plunged 40 per cent since.