SYDNEY, AAP – Record prices for iron ore were helping miners and Australian shares, as the market edged closer to its highest level.

The benchmark S&P/ASX200 index was higher by 31.5 points, or 0.44 per cent, to 7093.2 at 1200 AEST.

The index is nearing its record, 7197.2, set in February last year days before the coronavirus crash began.

The All Ordinaries on Friday was up 29.7 points, or 0.40 per cent, to 7335.7 points.

Iron ore prices topped $US200 per tonne in futures trading overnight as Chinese steelmakers continue to demand the commodity.

Materials shares, which include mining stocks, were best performing and up 1.14 per cent.

Fortescue Metals rose 1.34 per cent to $23.05. BHP and Rio Tinto gained less than one per cent.

Meanwhile, the Reserve Bank surprised no one with more upbeat expectations for Australia’s economic recovery.

Significant monetary support will continue, supporting the creation of wealth for home buyers who can bank on low interest rates for years.

The bank’s statement said monetary policy would need to remain “highly accommodative” for some time yet.

The Aussie dollar gained on optimism about the economy.

The dollar rose from buying 77.78 US cents before the statement, to 77.93 US cents.

Elsewhere, shares in information technology continued their plunge this week.

Shares were down 2.85 per cent after crashing on Thursday by 3.6 per cent.

The losses come after US Treasury Secretary Janet Yellen suggested that interest rates might need to rise in an economy rapidly recovering from the pandemic.

Afterpay was lower by 6.59 per cent to $92.94.

Financial software provider Xero dropped 2.67 per cent to $133.63.

Earlier, US shares rallied, led by financials and industrials, after a report showed the number of Americans filing new claims for unemployment benefits fell below 500,000 for the first time since the pandemic started.

Macquarie Group reported a 10 per cent rise in full-year profit, helped by its markets trading.

The group revealed net profit after tax of $3.01 billion for the 12 months to March 31.

Shareholders will receive a final dividend of $3.35 per share, 40 per cent franked. This is higher than the previous final payout of $1.80 per share, 40 per cent franked.

Shares on the ASX were higher by 0.36 per cent to $159.58.

The big four banks were all up. NAB was best and rose 1.18 per cent to $26.87.

Bendigo had a rise of 1.55 per cent to $10.43.

Property advertising group REA said its third-quarter earnings were higher by 13 per cent thanks to a booming housing market.

Shares were higher by 2.18 per cent to $157.20.

The Australian dollar was buying 77.87 US cents at 1200 AEST, higher from 77.41 US cents at Thursday’s close.