(Updates with closing levels, details)
By Victoria Thieberger
MELBOURNE, Jan 25 (Reuters) - Australian shares advanced 0.5 percent on Friday ahead of a long weekend, climbing for an eighth straight session and touching a 21-month high on positive economic news from top trading partners.
For the week, the market scored a gain of 1.3 percent, boosted by solid China and U.S. manufacturing data and moves by Japanese policymakers to reflate their economy. The benchmark has risen 3.8 percent so far in January.
“The PMI indicators from the U.S., Europe and China should serve to keep markets tracking higher,” said CMC Markets senior trader Tim Waterer.
The benchmark S&P/ASX 200 index closed up 25 points at 4,835.2, with volumes heavy in options-related trading. It was the best close since April 28, 2011. Australian markets will be closed on Monday for the Australia Day holiday.
New Zealand’s benchmark NZX 50 index finished up 0.2 percent at 4,199.8.
Karoon Gas Australia Ltd leapt 14 percent to A$6.15 after it said it had found oil at its Kangaroo-1 well off the coast of Brazil.
Shares in contractor Macmahon Holdings ended down 3.6 percent at A$0.27. Macmahon said it may face a problem at Mongolia’s giant Tavan Tolgoi coal mine after April, if its client Erdenes Tavan Tolgoi does not sort out funding difficulties.
Shares in retailer Specialty Fashion Group surged 38.6 percent to A$0.97 after the company forecast its first-half net profit would nearly triple - a rare earnings upgrade for the battered retail sector. The company is due to report results on Feb. 18.
Healthcare firm ResMed , which makes products to treat sleep disorders, saw its shares jump 7 percent to A$4.58 after second-quarter net profit rose 24 percent, with revenue up 13 percent on U.S. and European demand. (Editing by Edwina Gibbs)