The ASX200 has recorded a modest bounce but the energy sector has closed down as oil prices dropped under $US74 a barrel.
The local share market has put together a modest bounce, clawing back some of the previous day's sharp losses - although energy stocks continued their decline.
The benchmark S&P/ASX200 index on Thursday finished up 31.9 points, or 0.4 per cent, to 7,982.4, while the broader All Ordinaries gained 30.7 points, or 0.38 per cent, to 8,187.7.
A readout overnight on the US labour market helped stabilise the market, which on Wednesday plunged 1.9 per cent after a monthly report showed continued weakness in the US manufacturing sector.
The latest report showed a greater-than-expected decrease in US job openings in August with job vacancies at their lowest since January 2021.
Moomoo analyst Jessica Amir said the report increased the odds the US Federal Reserve would opt for an interest rate cut of 0.5 percentage points in two weeks, rather than a more usual 0.25 percentage point cut.
Ms Amir said some investors were "nibbling into the stock dip" following the sell-off, apparently accustomed to the idea that the market would recover in time, just as it did following a similar plunge a month ago.
Capital.com analyst Kyle Rodda said the market was now waiting for the US non-farms payroll report on Friday night for a definitive read on the US labour market, so the next 48 hours were likely to be choppy and possibly volatile.
Seven of the ASX's 11 sectors finished higher on Thursday and four closed lower.
Energy was by far the worst performer, dropping 3.9 per cent as Woodside traded ex-dividend and Brent crude dropped to less than $US73 a barrel for the first time since December on signs of a deal to end a production shutdown in Libya.
Woodside fell 6.8 cent to a two-year low of $25, Santos dipped 0.7 per cent to a six-month low of $7.02 and Beach Energy retreated 2.6 per cent to an almost three-year low of $1.13.
In the financial sector, Challenger plunged 11.0 per cent to a four-month low of $6.23 after Apollo Global Management reduced its stake in the annuity provider from 20.1 per cent to 9.9 per cent.
All of the big four banks were higher, with NAB and Westpac both rising 1.5 per cent, to $38.50 and $31.58 respectively, while ANZ climbed 2.6 per cent to $31.25 and CBA added 1.0 per cent to $141.35.
In the heavyweight mining sector, BHP grew 0.7 per cent to $38.91 and Rio Tinto added 1.3 per cent to $107.09 while Fortescue dropped 0.4 per cent to an almost two-year low of $16.13 in its fifth straight losing session.
Coronado Global Resources plummeted 16.0 per cent to an almost three-year low of 92c after the coking coal producer lowered its production guidance, citing heavy rain at its Curragh mine in Queensland and required repairs to its overland conveyor.
In tech, NextDC rose 8.4 per cent to a one-week high of $17.42.
In response to a query, the data centre operator told the ASX it had no explanation about why its shares had soared, but it came after a Blackstone-led consortium agreed to pay $23.5 billion for AirTrunk - one of the biggest buyouts in Australian history.
Goodman Group and New Zealand's Infratil rose as well, by 1.6 per cent and 3.8 per cent respectively.
Both companies also own data centres, which some have described as the "picks and shovels" of the AI gold rush.
The Australian dollar was buying 67.24 US cents, from 67.12 US cents at Wednesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Thursday up 31.9 points, or 0.4 per cent, at 7,982.4
* The All Ordinaries gained 30.7 points, or 0.38 per cent, at 8,187.7
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 67.12 US cents, from 67.12 US cents at Wednesday's ASX close
* 96.31 Japanese yen, from 93.39 Japanese yen
* 60.61 euro cents, from 60.69 euro cents
* 51.12 1.17 British pence, from 51.17 pence
* 108.35 NZ cents, from 108.53 NZ cents
