At the 16.15pm (AEDT) close, the benchmark S&P/ASX200 index gained 34.5 points, or 0.96 per cent, at 3615.7.

The broader All Ordinaries index rose 25.5 points, or 0.72 per cent, to 3547.2.

Macquarie Private Wealth adviser Helen Spencer said a rebound in financial stocks after a bumpy week helped offset losses in resources, which were hurt by falling commodity prices.

"It is certainly a very encouraging result considering a weak lead into today`s market, with the US down quite heavily and commodities hit quite hard again overnight,`` Ms Spencer said.

Oil prices tumbled to their lowest levels for more than four years at under $US38 per barrel in New York, while the Dow Jones industrial average lost almost 2.5 per cent to 8604.99.

BHP Billiton, Australia`s largest oil producer, slumped $1.08, or 3.48 per cent, to $29.92.

Rival Rio Tinto shed 99 cents, or 2.48 per cent, to $39.01.

Rio`s long- and short-term corporate credit ratings have been downgraded by Standard & Poor`s Ratings Services because of its $US38.9 billion ($A56.3 billion) debt burden.

Other energy producers also dropped, with Woodside down 4 per cent to $32.45 and Oil Search off 6.7 per cent to $4.19.  Santos was up 19 cents to $14.29.

The financials posted strong gains to edge the market higher.

"There is a bit of a recovery in the financial stocks after their recent bedding down, so certainly a bit of bargain-hunting coming back in there and that`s helping to boost the bank stocks today," Ms Spencer said.

NAB rose 18 cents to $20.00, ANZ added 37 cents to $14.64, while Westpac lifted $1.37 to $17.31.

CBA gained $1.30 to $27.80.

The bank told the market it did not believe information concerning its 2009 bad and doubtful debt expense was material to the company and required disclosure, after receiving a `please explain` from the Australian Securities Exchange.

Qantas shares rose 21 cents, or 8.64 per cent, to $2.64 after plans for a merger with British Airways were called off.

Gold miners were mixed.  Newcrest Mining was up 10.34 per cent to $33.50, Lihir Gold added six to $2.80, while Newmont Mining lost 9 cents to $5.51.

At 16.26pm AEDT, the spot price of gold in Sydney was $US851.30 per fine ounce, down $US13.70 on Thursday`s close of $US865.00.

On the Sydney Futures Exchange at 1615 AEDT, the March share price index contract was 31 points higher at 3,603 on a volume of 3,633 contracts.