The Australian share market clawed back its early losses to finish with gains on the back of positive news around iron ore and the banks’ profit results due next week.

The market was down two per cent for the week.

Brazilian iron ore giant Vale, the world’s largest producer, said it was willing to withhold 30 million tonnes of higher cost output.

Coming on the back of BHP’s own statements about slowing its expansion and Fortescue founder Andrew Forrest’s call for a cap on production, it is set to spark a rally in prices and miners’ share prices.

Quay Equities head of trading Tristan K’Nell said the banks had driven the market into positive territory, with traders buying in now to beat share price rises next week if they report strong profit gains as expected.

An expansion in China’s manufacturing activity in April for the second straight month, announced on Friday, was also positive for shares, he said.

BHP Billiton gained 53 cents to $32.50, Rio Tinto was $1.14 higher at $58.29 and Fortescue Metals leapt up 20 cents, or 9.2 per cent, to $2.37.

Atlas Iron remains in a trading halt but released some good news that it would keep two of its mines running, reversing its recent decision to shut down because of low prices.

Other smaller junior miners did well, with BC Iron eight cents, or 18.6 per cent, up at 51 cents, Mount Gibson one cent, or 4.9 per cent, better at 21.5 cents.

Westpac was the best of the banks, rising 27 cents to $36.73, Commonwealth Bank added five cents to $88.92, ANZ added 16 cents to $34.15 and National Australia Bank was up four cents at $36.81

KEY FACTS

* At the close on Friday, the benchmark S&P/ASX200 index was 24.4 points, or 0.42 per cent, higher at 5,814.4.

* The broader All Ordinaries index was up 25.1 points, or 0.43 per cent, at 5,798.8,.

* On the ASX 24, the June share price index futures contract was 42 points higher at 5,799, with 26,643 contracts traded.

* National turnover was 674.9 million securities worth $1.6 billion.