The Australian sharemarket has closed higher after the central bank lifted its forecasts for economic growth.

On Friday the Reserve Bank of Australia revised its economic growth forecast for the year to December 2014 to between 2.25 per cent and 3.25 per cent, up from two per cent to three per cent in forecasts issued in November.

IG market analyst Stan Shamu said there was a perception that the central bank now had a hawkish bias, despite earlier affirming a neutral stance on interest rates.

“With that in mind the market managed to push higher and there’s also a little bit of optimism that we’ll see a further bounce back in the US non-farm payrolls number tonight after a disappointing December,” Mr Shamu said.

“Also there has been a minor improvement in some of the emerging markets.”

The resources sector drove most of the gains, with BHP Billiton up 52 cents at $36.09, Rio Tinto up 31 cents at $65.96 and iron ore miner Fortescue up 17 cents at $5.60.

Aurora Oil and Gas shares soared after it received a $1.8 billion takeover offer from Canada’s Baytex Energy Corp worth $1.8 billion.

Its shares were up $1.47, or 56 per cent, at $4.09.

Shares in media group News Corporation were up $1.41, or 8.2 per cent, at $18.61 after it posted a better than expected second quarter profit of $US150 million, despite declining revenues from its Australian newspapers.

Among the banks, National Australia Bank was up 15 cents at $32.78, ANZ was up two cents at $29.45, Commonwealth Bank was up four cents at $73.52, while Westpac was 42 cents higher at $31.25.

KEY FACTS

* At the close on Friday, the benchmark S&P/ASX200 index was 35.1 points, or 0.68 per cent, higher at 5,166.5.

* The broader All Ordinaries index was up 37.1 points, or 0.72 per cent, at 5,184.5.

* The March share price index futures contract was 38 points higher at 5,120, with 24,540 contracts traded.

* National turnover was 1.3 billion securities worth $4.1 billion.