Australian shares have started the day higher, tracking gains on Wall Street.

ASX 200 is up 74 points, or 1 per cent, to 7,256 at 10.32am AEST.

The Australian dollar was up at 71.61 US cents this morning.

Shares of AGL Energy dropped 2.7 per cent to $8.63 after news about the company scrapping its plans to demerge its coal-focused generation business.

ANZ was up 0.2 per cent to $25.72 despite being sued by the corporate watchdog ASIC for allegedly misleading its customers about how much they have got left to spend on their credit card accounts. 

Among the top performers were A2 Milk (+9.3pc), Novonix (+9.1pc) and Block (+7.7pc).

Global markets enjoyed a broad-based rally on Friday.

Wall Street rallied on after the data, with all three major US stock indexes bringing a decisive end to their longest weekly losing streaks in decades.

The US Federal Reserve, in minutes from its May meeting released earlier this week, called inflation a serious concern.

A majority of the central bankers backed two half-a-percentage-point rate hikes in June and July, as the group attempts to curb inflation without causing a recession.

The Fed did leave room for a pause in hikes if the economy weakens.

Analysts said the consumer spending and inflation data was encouraging and supported growth estimates for the second quarter that are mostly above a 2.0 annualised rate.

“The growth engine of the US economy is still alive and kicking, and that’s important,” said Joe Quinlan, head of CIO Market Strategy for Merrill and Bank of America Private Bank.

“Growth estimates for [the second quarter] are still good. There is a better tone in the market than we have seen in recent weeks, in terms of inflation possibly peaking here. Maybe we can avoid stagflation.”

The MSCI world equity index, which tracks shares in 45 nations, was up 2.12 per cent.

European shares hit a three-week high and rose 1.42 per cent. Britain’s FTSE also hit a three-week high, and was heading for its best weekly showing since mid-March.

The Dow Jones Industrial Average rose 575.77 points, or 1.76 per cent, to 33,212.96, the S&P 500 gained 100.4 points, or 2.47 per cent, to 4,158.24 and the Nasdaq Composite added 390.48 points, or 3.33 per cent, to 12,131.13.

On oil markets, Brent crude oil was up, trading at $US119.72 a barrel, by 10:52am AEST.

ABC/Reuters