The Australian Wool Exchange (Awex) eastern market indicator (EMI) this week rose seven cents to 556 cents a kg at sales in Sydney and Adelaide. At Fremantle, the western indicator rose five cents to 514 cents.

The rally followed the slump of the week before when sales resumed after a three week break and the Awex EMI fell by 44 cents to 549 cents a kg.

"The wool market opened this week on a stable note following the heavy price falls experienced last week," pastoral house Wesfarmers Dalgety Ltd said in its wool weekly report.

The majority of micron categories in all three selling centres achieved small price increases, it said.

The exception was in Adelaide where 24-26 micron wool suffered heavily on the first day of sales. However, selling on the last two days saw these medium to broad micron wools improve with increased Chinese buying,it said.

"After the massive falls seen at sales last week the firmer market this week saw pass-in rates fall to a National level of 13.9 per cent," it said. A total of 65,190 bales were offered.

Improved market conditions came as some new orders filtered through and as China showing renewed interest, it said.

Topmakers remained the dominant buying force and would also be the major buyers of stockpile wool, the Australian Council of Wool Exporters said.

"But the immediate uncertainty (is) whether Wool International's (WI) legislation can be changed prior to the announcement of a Federal election or if some other legal means can be found to give effect to cabinet's decision to freeze stockpile sales for the remainder of this season," it said.

This was not providing any confidence or direction to the market, it said.

The positive benefits for wool which would normally flow from a weakening of the Australian dollar against the US dollar and other buying currencies continued to be swamped by morefundamental problems on the demand side, it said.

WI stockpile sales were suspended this week, leaving the unsold stockpile at 1,105,269 bales.

Auctions continue next week in Sydney and Melbourne with 54,045 bales rostered for sale.