The Wall Street rally was based on growing optimism about the prospect for an economic recovery in the US.
At 12.13pm AEDT, the benchmark S&P/ASX200 had gained 54.6 points, or 1.5 per cent, at 3,701.3, while the broader All Ordinaries added 54.2 points, or 1.51 per cent, to 3,640.5.
Burrell Stockbroking director Richard Herring said the local market was heading towards a positive end to the week.
"We've had a firm opening after a nice lead from Wall Street again overnight," he said.
"The banks are mixed, certainly there have been some positive moves with Commonwealth Bank after their update.
"We've had a very good week so it seems people might be happy to consolidate that move over the week today."
Making news, Australia's biggest lender Commonwealth Bank of Australia said it was one of the most strongly capitalised banks in the world, which will position it well despite the worsening economic slowdown.
Commonwealth Bank added 34 cents to $35.09.
Westpac fell nine cents to $19.51, National Australia Bank increased four cents to $21.03 and ANZ lost 12 cents to $16.68.
BHP Billiton, which makes up about 12 per cent of the All Ordinaries index, advanced 42 cents, or 1.24 per cent, to $34.20.
Rival Rio Tinto gained $2.84, or 5.19 per cent, to $57.54.
Walgreen profits decline 7%
Banks lead share market higher at noon
Bernard Madoff says he is ashamed
Shares remain in the red at noon
