At 12.00pm (AEDT), the benchmark S&P/ASX200 index was up 36.3 points, or 1.03 per cent, to 3,567.7.
The broader All Ordinaries index gained 33.1 points, or 0.98 per cent, at 3501.3.
The stock market will close around 2.30pm AEDT and will not trade again until Monday, December 29.
CMC Markets corporate dealer Andrew Knight said the market's move upwards was surprising given that US markets were lower overnight, and pre-Christmas trading was typically thin.
"The banks on the whole are seeing a bit of buoyancy coming in but there's no volume behind it,'' he said.
"The consumer staples (stocks) and the telcos seem to be standing out at the moment, but apart from that it does seem to be driven by a bit of sentiment coming into the market after two down days this week.''
In the resources sector, global miner BHP Billiton was up 27 cents at $28.76 while Rio Tinto added four cents to $35.41.
Oil and gas producer Woodside Petroleum improved 69 cents to $32.85, and Santos stepped forward 30 cents to $14.14.
AGL Energy was off 27 cents at $15.18 vas it made a $171 million takeover offer for coal seam gas producer Sydney Gas.
Sydney Gas was up 54.55 per cent at 42.5 cents.
Among the major banks, NAB ascended 13 cents to $19.73, Westpac rose 17 cents to $16.43, and ANZ reversed 17 cents to $14.70.
Commonwealth Bank surrendered 14 cents to $26.90 as it said it would acquire up to $4 billion of mortgages originated by Wizard Home Loans.
Among the retailers, Wesfarmers, which owns Coles, was up 48 cents at $16.68, and Woolworths jumped 60 cents to $26.33.
The peak retail industry body, the Retailers' Association, said that pre-Christmas sales were up on last year's record by 4 per cent.
Telco Telstra was up 7 cents to $3.74, and Optus-owner SingTel lost 1 cent to $2.58.
In the media sector, News Corp fell 11 cents to $13.04 and its non-voting stock retreated 23 cents to $12.01.
Consolidated Media shed 5.5 cents to $1.815, and Fairfax Media was steady at $1.55.
Among gold stocks, Newmont dipped 8 cents to $5.40, Newcrest dumped 90 cents at $31.52, and Lihir gave away six cents at $2.79.
The price of gold in Sydney at 12.21pm AEDT was $US838.05 per fine ounce, down $US6.45 on yesterday's close of $US844.50.
On Wall Street overnight, stocks fell in thin trading as US growth and housing data showed that the US economy continued to struggle.
The Dow Jones Industrial Average fell 1.18 per cent to 8419.49 and the Standard & Poor's 500 index was 0.97 per cent lower at 863.16.
On the Sydney Futures Exchange, the March share price index futures contract was 92 points lower at 3558 on a volume of 8849 contracts.
Lower rates spark wave of refinancing
Share market lower on thin trade
Shares up as miners gain
Investors holding Tennessee stocks take a beating
