At 10.15am (AEST), the benchmark S&P/ASX200 was up 42.5 points, or 1.09 per cent, at 3936.9, while the broader All Ordinaries had gained 43.22 points, or 1.11 per cent, at 3931.1 points.
Bell Potter senior adviser Stuart Smith said China caused the rise in commodity prices.
"It looks like China is stockpiling commodities - and companies like Rio - at what they view to be cheap prices,'' Mr Smith said.
"There are great economic and political uncertainties affecting the market.
"For today it's resources up, banks down, market up.''
The major banks were mixed as the market opened.
Commonwealth Bank shed 15 cents to $36.01, Westpac was down 7 cents at $18.87, ANZ dropped 12 cents to $16.07 and NAB picked up 13 cents at $22.65.
Macquarie Group says it is not aware of any reason or information not already announced that could have prompted a lift in its share price since late last week. Its shares climbed 76 cents, or 2.15 per cent, to $36.15.
Resource stocks surged in morning trade.
BHP Billiton was up 1.96 per cent at $36.44, while rival Rio Tinto, which confirmed it has settled iron ore supply contracts for 2009 with most of it Asian customers, rose 4.63 per cent to $69.40.
Oil stocks rallied, after oil prices soared above $US68 for the first time in seven months.
Woodside gained 1.89 per cent to $44.85, Oil Search put on 2.27 per cent to $5.86 and Santos gained 12 cents to $14.97.
Among the gold miners, Newmont lost 3.85 per cent to $6.00, Newcrest fell 8 cents to $33.64, and Lihir dropped 2 cents to $3.29.
The spot price of gold in Sydney at 10.40am (AEST) was $US974.40 per fine ounce, down $US9.70 on yesterday's close of $US984.10.
Wall Street stocks shot higher overnight as a bullish mood overshadowed a massive bankruptcy filing by General Motors. The Dow Jones Industrial Average rose 221.11, or 2.6 per cent, to 8,721.44. The Standard & Poor's 500 index rose 23.73, or 2.6 per cent, to 942.87. The Nasdaq composite index rose 54.35, or 3.1 per cent, to 1828.68.
On the Sydney Futures Exchange, the June share price index contract was 49 points higher to 3937 on a volume of 8575 contracts.
