Despite a poor lead from Wall Street, sentiment turned around after data showed inflationary pressures were receding, setting the stage for a potential rate cut next week.
Retailers benefited most from the CPI data, with David Jones and Myer rising more than 3.5% each.
The possibility of lower interest rates spurred gains in the big four; Westpac and NAB were the best performing, up more than 1% each.
However the recent sharp fall in iron ore prices capped the advance among some of the bigger miners; BHP lost 0.6% whilst Rio ended up a modest 0.2%.
The ASX 200 put on 15 points (+0.4%), closing at 4243.