Australian shares made modest gains on the back of strength among the major banks but retail stocks fell on fears over Amazon's impact on the big supermarkets.

A pullback in late trade could not take the gloss off a strong week for the major banks with the Australian share market edging higher at the close.

The share market has suffered a sharp drop as investors took profits, while strong jobs data boosted the Australian dollar.

The share market has posted another significant gain and the Australian dollar is slightly stronger.

Strong gains by the major banks have pushed the share market to its best session in seven months.

The local market has closed slightly ahead on the back of a strong performance by mining stocks.