The Australian sharemarket rebounded from a $63 billion wipeout as bargain hunters piled back into equities after strong US economic data kept the possibility of rate cuts on the cards.

The S&P/ASX 200 Index was up 39.10 points, or by 0.4 per cent, at 8940.50, having traded as high as 8964.10 points in the morning session, buoyed by a strong rally on Wall Street overnight.

Stocks were sold off around the world on Wednesday, sending the ASX 200 diving 1.9 per cent, amid fears of a protracted war in Iran that will keep oil prices elevated and reignite inflation. Brent rose a further 3.1 per cent to $US83.90 a barrel at the close of trading.

But strong US economic data – including private payrolls and the ISM Services Index – eased some of those fears and kept hopes of rate cuts from the Federal Reserve alive.

“The modest recovery comes as traders appear to be finding their footing as the initial shock fades, though uncertainty remains elevated,” said Global X ETFs senior product and investment strategist Marc Jocum.

On the ASX, investors rotated into rate-sensitive technology stocks with WiseTech Global rallying 7.1 per cent to $47.57 and Xero 4.3 per cent to $83.89.

Defensive health stocks also climbed. CSL rose 2.5 per cent to $146.49 after its vaccine business Seqirus secured a contract to supply 15 million flu vaccines to Canada in the event of a pandemic. Pro Medicus rallied 4.6 per cent to $121.49.

The energy sector climbed, extending its advance over five days to 8 per cent, even as Woodside slipped 1 per cent to $30.45 as it traded ex-dividend. Refiners had the strongest gains with Viva Energy jumping 11.9 per cent to $2.07, and Ampol by 8.5 per cent to $32.06, on reports China has instructed its top oil refiners to suspend diesel and gasoline exports.

“This provides a direct boost to Australian fuel retailers and refiners, who stand to benefit from higher margins and stronger pricing,” Jocum said.

The mining sector finished lower as BHP retreated 1 per cent to $55.15 after it traded ex-dividend. Fortescue climbed 2.1 per cent to $19.39 and Rio Tinto 1.2 per cent to $164.58 as iron ore briefly cracked $US100 a tonne.

But gold miners were weaker as investors continued to take some profits off the table. Genesis Minerals lost 4.2 per cent to $7.25 and Northern Star 1.9 per cent to $29.36.

And DroneShield jumped 10.1 per cent to $3.70, rebounding from heavy selling this week despite the heightened drone activity in the Middle East.

Stocks in focus

In corporate news, Pengana Capital added 3.5 per cent to 74.5¢ as it appointed Antipodes to assist with the management of its international equities listed investment company.

The Lottery Corporation fell 0.7 per cent to $5.36 amid plans to implement a new operating model in July that will create three customer-facing business units. It’s also reshaping its executive team.

Deep Yellow fell 2.4 per cent to $2.46 as its shares resumed trading after it quashed a media report that it was planning a capital raising.

And Star Entertainment was flat at 12¢. The Federal Court’s Justice Michael Lee has ruled that the Australian Securities and Investments Commission failed to prove its case against the majority of Star Entertainment’s directors. The court did, however, make an adverse finding against former CEO Matt Bekier.