Steve Smith returned to form with a century for Australia, but England hit back to dismiss the tourists for 416 in the second Test at Lord's on Thursday.

Smith had flopped with scores of 16 and six during Australia's thrilling two-wicket win in the first Test at Edgbaston last week as the Ashes holders went 1-0 up in the five-match series.

The 34-year-old put those low totals behind him with an innings of 110 -- the 32nd Test century of his brilliant career, his 12th in all Ashes contests and eighth in England.

England, however, recovered well with the ball after Australia had been 316-3 late on Wednesday's first day, taking the last seven Australia wickets for 100 runs.

Australia, despite being sent into bat in overcast conditions and on a green-tinged pitch that favoured England's quicks, had resumed well-placed on 339-5.

Smith was 85 not out, just 15 runs shy of his second Test century at Lord's following a superb 215 eight years ago at the 'Home of Cricket'.

Australia's position would have been even stronger had Joe Root, the world's number one-ranked Test batsman, not taken two wickets in four balls with his off-spin to remove Travis Head and Cameron Green.

England's pacemen had failed to make the most of helpful conditions after captain Ben Stokes won the toss on Wednesday.

And there were more worrying signs when Stuart Broad speared his first two balls down the legside, with left-hander Alex Carey glancing both deliveries for comfortable fours.

But Broad, regaining his accuracy, had Carey lbw on review for 22 after rapping the wicketkeeper's back leg.

Mitchell Starc got off the mark in style first ball when he clipped Broad past mid-on for four.

But James Anderson had Starc well caught by wicketkeeper Jonny Bairstow to leave Australia 358-7.

Starc's exit brought in Australia captain Pat Cummins, whose batting heroics had guided the tourists to victory in Birmingham. 

Smith went to 99 with a fortunate nick to third man for four off Anderson.

Anderson then produced an excellent yorker which Smith just got the bat down on in time.

But the very next ball saw Smith drive Anderson through the covers to complete a 169-ball century with his 14th four.

Smith fell soon afterwards when a booming drive off Josh Tongue was superbly caught by a diving Ben Duckett in the gully.

Pace bowler Tongue finished with figures of 3-98 from 22 overs on his Ashes debut. 

Nathan Lyon fell into an obvious hooking trap before Ollie Robinson ended the innings when last man Josh Hazlewood was caught in the slips.

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