The benchmark S&P/ASX200 index gained 0.5 per cent on Friday and 0.3 per cent over the week to end at 5252.2, while the broader All Ordinaries gained 0.5 per cent on Friday and 0.3 per cent for the week to end at 5316.0.

But it was a volatile week, with two sessions ending lower, despite surprisingly soft inflation data fuelling hopes of a May rate cut by the Reserve Bank of Australia.

Figures on Wednesday showed consumer prices falling 0.2 per cent in the first three months of the year and the annual core inflation rate falling to a new low of 1.55 per cent, prompting markets to swiftly price in an about 50 per cent chance of the Reserve Bank cutting by 25 basis points at its board meeting on Tuesday.

And Friday's strong finish came despite a poor US lead, with billionaire activist investor Carl Icahn confirming he had sold his entire stake in Apple, pulling down the heavyweight stock, and in turn major indices.

Mr Icahn, who cited China's influence on the stock for the decision, said he was "still very cautious" on the US stock market and there would be a "day of reckoning" unless there was some sort of US fiscal stimulus.

"Shares ... (weren't) helped by some disappointing earnings results from US tech stocks and surprise inaction by the Bank of Japan," said AMP Capital chief economist Shane Oliver.

Dr Oliver said the week's big surprise was the decision by the Bank of Japan to not undertake more monetary easing despite soft economic data, below-target inflation, strength in the Yen and the earthquakes.

"Maybe the Bank of Japan is waiting to assess a fiscal response from the Japanese government and get the May 26-27 Group of 7 (major industrialised countries) summit to be held in Japan out of the way," he said. "Our assessment is that more Bank of Japan easing is just a matter of time."

The Bank of Japan's decision was instrumental in China strengthening its currency by the most in more than a decade on Friday.

After the yen strengthened following the Bank of Japan's decision, the People's Bank of China on Friday set the daily fixing rate at 6.4589 against the US dollar, up 365 basis points from Thursday's rate. It was the biggest upward move since 2005.

The mining sector managed a positive gain for local sharemarket over the week despite iron ore - the price of which is seemingly being swayed by speculators - dropping like a stone.

Last week, iron ore rocketed 16 per cent to $US70.46 per tonne. By Friday this week, Australia's largest mineral export was back at $US62.90 a tonne.

Mining stocks still managed to gain for the week with BHP Billiton up 1.6 per cent for the week to $20.68 and Rio Tinto rising 1.1 per cent to $51.55. Pureplay iron ore miner Fortescue put on 1.5 per cent to $3.41.

Among the banks Westpac Banking Corporation was up 1.2 per cent on Friday but declined 0.8 per cent down for the week to $31.05, National Australia Bank rose 0.7 per cent on Friday and declined 1.6 per cent for the week to $27.19, Commonwealth Bank was flat on Friday and fell 1.5 per cent for the week to $73.89 and ANZ rose 1 per cent on Friday and fell 0.3 per cent for the week to $24.27.

Pacific Brands was the week's best-performing stock amid news of a $1.1 billion takeover by the world's largest intimate apparel company HanesBrands.

HanesBrands – the owner of WonderBra and Hanes Beefy Ts – said it could almost double Pacific Brands' earnings within three years by shifting production from contract manufacturers to its own factories in Asia, boosting sales of Bonds and Sheridan through retail stores and possibly taking some of PacBrands' smaller labels into new markets overseas.

Pacific Brands' long-suffering shareholders will not get to share in the company's long-term growth but will be compensated with a cash offer worth about $1.19 a share, including cash and a special fully franked dividend.

Shares leapt 32.3 per cent for the week to $1.15.

Broadspectrum was the week's second-best performer, its shares surging the most in more than four months, after the board of the defence and maintenance-services provider changed tack and recommended shareholders accept a $769 million bid by Spain's Ferrovial.

Broadspectrum said the certainty of Ferrovial's offer may now be attractive after a decision by Papua New Guinea to close the Manus Island refugee processing camp increased uncertainty about its future earnings. Ferrovial earlier this month upped its offer to $1.50 a share in cash from $1.35, saying that the bid was final and would close on May 2.

Broadspectrum shares jumped 18.4 per cent to $1.48.