At 12.09pm (AEDT), the benchmark S&P/ASX 200 was 42.1 points, or 1.14 per cent higher to 3722.3, while the broader All Ordinaries was up by 41.3 points, or 1.14 per cent, at 3663.5.
On the Sydney Futures Exchange at 12.10pm (AEDT) the June share price index contract was 51 points higher at 3727 on volume of 14,314 contracts.
At 12.11pm (AEDT), shares in BHP Billiton had risen $1.10 to $34.48 and Rio Tinto had gone up $1.75 to $59.71.
Senior trader with MF Global, Anthony Anderson, said changes overnight to accounting standards by the US Financial Accounting Standards Board (FASB) had buoyed the market.
The changes meant that US banks are able to use internal valuation models to value off-balance sheet toxic assets instead of mark-to-market valuation methods.
"We have seen a lot of support packages before and money floating in the system, but what people are really focusing on is the accounting changes," Mr Anderson said.
"I think that has been reflected in some of our banking stocks," he said.
The market opened strongly, following the leads of Wall Street and European markets, which rose on news from the summit of G20 leaders in London.
The summit agreed to to inject $US1 trillion ($1.4 trillion) into the global financial system as part of a rescue package, pushing the Dow Jones Industrial Average up 2.79 per cent to 7,978.08.
The banking sector was stronger in morning trade.
Commonwealth Bank had gained 47 cents to $35.82, NAB was up 86 cents to $22.36, Westpac rose 49 cents to $20.39 and ANZ had gone up 66 cents to $17.00.
Retailers were down slightly. At 12.29pm (AEDT), Wesfarmers had fallen 13 cents to $19.58, David Jones shares were six cents lower at $2.80, and Woolworths was down seven cents to 24.93.
Mr Anderson was upbeat about the share market's prospects and said it appeared market sentiment had changed.
"There is a better undertone to it. You can see it in the number of short positions in the States," he said.
"The market is certainly under way and possibly even short, so I think it will just be a buy-on blitz," he said.
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