At 12.00pm (AEST), the benchmark S&P/ASX200 was up 90.2 points, or 2.41 per cent, at 3827.7, while the broader All Ordinaries gained 84.3 points, or 2.26 per cent, to 3822.3 points.
ABN Amro Morgans private client adviser Craig Walker said the local market had continued to rise since a strong opening.
"The market started off particularly well after a good lead last night from Wall Street,'' Mr Walker said.
"There was a positive report from an analyst on the banking sector, Goldman Sachs in particular.''
Overnight, US banking stocks surged after analyst Meredith Whitney upgraded her rating on Goldman Sachs.
At home, Mr Walker said BHP Billiton was contributing about 15 points to the index.
"Aside from that, the financials are having a strong rally and, despite a flat oil price, even the energy stocks are having a good run.''
At 12.02pm, Rio Tinto shares were up $1.19, or 2.55 per cent, at $47.82 and rival BHP Billiton had gained $1.21, or 3.79 per cent, to $33.41.
The financial sector was also higher.
Commonwealth Bank gained $1.10, or 3 per cent, to $37.82, ANZ lifted 31 cents, or 1.97 per cent, to $16.06, Westpac rose 52 cents, or 2.75 per cent, to $19.43, and NAB was up 54 cents, or 2.46 per cent, at $22.48.
On the Sydney Futures Exchange, the September share price index contract was 90 points higher at 3793 on 14,184 contracts.
Dollar flat in directionless trade
