The S&P/ASX 200 index was up 0.5 per cent at 6,778.8 points at the close of trade, after falling as much as 0.15 per cent earlier in the session.
The Australian dollar weakened 1.5 per cent overnight, as investors abandoned bets on higher interest rates domestically, while tighter coronavirus lockdowns in Europe pushed bond yields down globally.
“I think the weaker Australian dollar is probably helping our exports and we are seeing a bit of rotation into the safety stocks,” said Damian Rooney, director of equity sales at Perth-based Argonaut.
The safe-haven US dollar strengthened to a four-month high on Wednesday as concerns over a third COVID-19 wave in Europe and potential US tax hikes sapped risk appetite and weakened other currencies.
In Australia, the healthcare sector, which is heavily exposed to the US market, ended 1.9 per cent higher as CSL Ltd rose 1.9 per cent to close at a three-week high, while hearing implant maker Cochlear Ltd added 3.7 per cent.
Technology stocks advanced 0.4 per cent, with buy-now-pay-later company Xero hitting a three-week high after acquiring Swedish e-invoicing firm Tickstar.
Heavyweight financial stocks climbed 0.4 per cent, with Commonwealth Bank of Australia gaining 1.9 per cent to mark its best session in more than three weeks.
Bucking the upward trend, energy stocks finished 0.9 per cent down, with Santos Ltd and Woodside Petroleum falling 1.5 per cent and 1.1 per cent, respectively.
Santos said it expects to make a final investment decision on its Barossa project in the coming weeks after the oil and gas producer postponed the call last year.
New Zealand’s benchmark S&P/NZX 50 index closed 0.3 per cent higher at 12,358.88 points. Electricity retailer Mercury NZ Ltd was the top gainer on the bourse.
Westpac Banking Corp said that it was in the early stages of assessing a possible demerger of its New Zealand business.
