At 10.15am (AEDT) the benchmark S&P/ASX200 index rose 2.3 points or 0.6 per cent to 3643, while the broader All Ordinaries index was up 4 points or 0.11 per cent at 3577.3.
The major miners were in positive territory with BHP Billiton up 69 cents at $31.05.
Rival miner Rio Tinto, which announced it plans to slash 14,000 jobs was 7.22 per cent higher at $40.10.
The banking sector was also positive with all the major players opening strong.
Westpac gained 3 cents to $16.40, Commonwealth Bank was steady at $28.50, NAB picked up 1 cent to $19.61 and ANZ lifted 6 cents to $14.21.
CMC Markets analyst David Taylor said the market's early gains had turned to a drop of about two per cent at 10.44am as bank falls outweighed strong resources.
"It was a pretty descent scenario we were looking at last night with base metals up, oil up and gold up,'' Mr Taylor said.
"But at the moment banks and consumer spending are leading the decline so it's not the happy picture we were hoping for.
"Fortunately BHP and Rio as well as Fortescue Metals are doing well, so commodity prices have helped the market to be perhaps not as low as it might otherwise be.''
Retail stocks were in the red with drops right across the sector.
Wesfarmers, which owns Coles, dropped 50 cents to $15.85 and Woolworths shed $1.00 to $26.08.
David Jones lost five cents to $2.96, while Harvey Norman was steady at $2.30.
Energy stocks were mixed.
Woodside dropped 87 cents to $32.83, Santos fell 5 cents to $13.85 and Oil Search increased 1 cent to $4.77.
Oil prices jumped amid volatile trading as a US government report showed crude inventories were much slimmer than expected.
US markets managed a moderate gain overnight after a investors snapped up energy and materials stocks and dumped financial shares.
The Dow Jones industrial average rose 70.09 or 0.81 per cent to close at 8761.42.
The Standard & Poor's 500 index rose 1.19 per cent to 899.24, and the Nasdaq rose 1.17 per cent to 1565.48.
On the Sydney Futures Exchange the December share price index contract was 26 points higher at 3647 on a volume of 5774 contracts.
Miners push share market higher
Share market opens higher
Markets are battered again
