(Adds analysis, quotes, stocks on the move)
SYDNEY, March 13 Australian shares climbed on Thursday, underpinned by a recovery in mining stocks after metals prices rose, while a robust jobs report provided additional momentum and lifted the market to session highs.
Australian employment surged by 47,300 in February, the biggest gain in 13 months and far above forecasts, in a hopeful sign that the economy is finally starting to generate jobs again.
"It's quite a good sign and in a sense it's realigning itself a little bit more with the data flow we've had over the past two weeks which have been pretty good," said Tom Kennedy, an economist at JP Morgan.
The S&P/ASX 200 index was up 0.7 percent or 38.4 points at 5,422.6 as of 0111 GMT. The benchmark fell 0.6 percent on Wednesday.
The benchmark touched a 5-1/2-year high of 5,462.3 points on March 7, underpinned by strong corporate earnings, but recent sessions have seen the market fall in five of the previous 10 sessions.
"Considering the rapid ascent that equity markets have enjoyed, it's perhaps no surprise that this type of erratic behaviour would eventuate," Niall King, a sales trader at CMC Markets, said in a note to clients.
Banking stocks reversed earlier losses after the jobs data. Westpac Banking Corp added 0.7 percent and Australia and New Zealand Banking Group rose 0.8 percent.
A recovery in resource stocks also helped buoy the market, with index heavyweights BHP Billiton Ltd and Rio Tinto Ltd climbing 1.1 percent and 1.8 percent, respectively.
Iron ore futures steadied after their steepest fall since 2009 earlier this week, while copper's gains were capped on concerns about China's economy and the tug-of-war between Russia and the West over Ukraine.
A handful of defensive stocks fell as investors bought into riskier assets. Consumer retail staple Wesfarmers Ltd shed 0.6 percent while biotechnology firm CSL Ltd traded flat.
In a statement on Thursday, German builder Hochtief AG said it has marginally sweetened a bid to increase its stake in Australia's biggest builder, Leighton Holdings Ltd , to about 74 percent from 58.77 percent currently. Hochtief is now offering A$1.205 billion ($1.08 billion), about 1.6 percent more than the A$1.155 billion it first offered on Monday. Shares in Leighton slipped 0.6 percent.
Discount retailer the Reject Shop Ltd jumped 5.6 percent after managing director Chris Bryce advised of his resignation. Last month the company said it had experienced a poorer-than-expected Christmas trading period, but said it now remains on track to meet its second half earnings targets.
New Zealand's benchmark NZX 50 index added 0.1 percent to 5,101.7. (Reporting by Thuy Ong; Editing by Chris Gallagher)