At 10.43am (AEDT), the benchmark S&P/ASX200 was up 75.3 points at 4086.
On the Sydney Futures Exchange, the December share price index futures contract was up 149 points 4176, on a volume of 10,400 contracts.
The gains were felt across all the major sectors.
Among the miners, BHP Billiton gained 63 cents, or 2.44 per cent, to $26.43, while rival Rio Tinto added $1.46, or 2.21 per cent, to $67.47.
In the banking sector, NAB rose 65 cents, or 2.86 per cent, to $23.35, Commonwealth Bank added 60 cents, or 1.42 per cent, to $43.00 and ANZ gained 54 cents, or 3.12 per cent, to 17.87.
Westpac rose 92 cents, or 4.18 per cent, to $22.92 and St George lifted $1.12, or 3.88 per cent, to $29.96.
Overnight Wall Street extended its unprecedented streak of volatility, as investors struggled with fears about a recession but gave in to a last-hour wave of buying.
The Dow Jones industrials fell by as much as 380 points during the session before closing up 401.35, or 4.68 per cent, to 8979.26.
Broader stock indicators also jumped. The Standard & Poor's 500 index rose 38.59, or 4.25 per cent, to 946.43, and the Nasdaq composite index rose 89.38, or 5.49 per cent, to 1,717.71.
Intersuisse director of equities Andrew Sekely said the stronger closing in the US was the main driver of sentiment today.
"It has a very direct effect, if you come to work and you find the Dow up as strong as it was," Mr Sekely said.
The market should hold on to its early gains but investor caution was likely to keep volumes down, he said.
"We're probably not up by as much as I thought it might be, but with the weekend coming up there is even more caution out there, and certainly the strength of the Dow is the catalyst," Mr Sekely said.
The energy sector was stronger despite further falls in the oil price overnight.
Woodside Petroleum was up $1.76, or 4.76 per cent, at $38.76, Santos rose 46 cents, or 4.22 per cent, to $11.36 and Oil Search gained 19 cents, or 5.4 per cent, to $3.71.
At 10.43am (AEDT), spot gold was trading in Sydney at $US800.45 an ounce, down $US42.15 on yesterday's close of $US842.60.
Among local gold stocks, Newcrest Mining dropped 70 cents, or 2.89 per cent, to $23.54, Newmont Mining fell 34 cents, or 7.52 per cent, to $4.18 and Lihir Gold was down 19 cents, or 9.13 per cent, at $1.89.
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