SYDNEY, AAP – Shares on the Australian market had their best day in three weeks despite oil and gas boycotts of Russia and a warning of higher inflation.

A broad-based rally on Wednesday produced gains of more than one per cent after a three-day losing streak.

The US declared a ban on Russian oil imports and European leaders said they would reduce gas imports from Russia due to its invasion of Ukraine.

Reserve Bank governor Philip Lowe said surging oil prices would produce annual inflation of four per cent in Australia this year.

The benchmark S&P/ASX200 index closed up 72.7 points, or 1.04 per cent, to 7053 points.

The index is still down about 600 points from its record high from August last year.

The All Ordinaries index closed higher by 78.9 points, or 1.09 per cent, to 7331.8 points.

The Australian dollar was buying 72.83 US cents at 1622 AEDT, lower than the 72.87 US cents at Tuesday’s close.