At 10.15am (AEST), the benchmark S&P/ASX200 index was up 55.9 points, or 1.23 per cent, at 4596.2 while the broader All Ordinaries had gained 53.6 points, or 1.18 per cent, to 4600.8.
IG Markets markets analyst Cameron Peacock said the market was a "sea of green''.
"Were seeing some really good broad based gains,'' Mr Peacock said.
"Materials is leading the way and the financial sector is doing particularly well.
"We're also seeing some strong buying in the gold stocks.''
The major banks were all higher.
ANZ increased 21 cents to $22.30 and NAB lifted 1.39 per cent to $28.54.
Westpac rose 14 cents to $23.94 and Commonwealth Bank was up 1.16 per cent at $47.05.
The mining giants were also stronger.
BHP Billiton was up 1.31 per cent at $38.75, while rival miner Rio Tinto increased 1.51 per cent to $59.87.
Energy stocks were up.
Woodside was up 60 cents to $49.10, while Oil Search added 11 cents to $6.36 and Santos was up 8 cents to $15.33.
The gold miners were also in the black.
Lihir was up 3.32 per cent at $3.11, Newcrest had added 2.99 per cent to $34.46 and Newmont added 8 cents to $5.41.
At 10.37am the spot price of gold in Sydney was $US1008.10 per fine ounce, up $US11.40 on yesterday's closing price of $US996.70.
In news, the Federal Government has defended its push to have Telstra broken up after flagged reforms caused a sharp fall in the telco's share price yesterday.
But at 10.41am its shares had recovered 2.89 per cent to $3.20.
Wall Street stocks lifted overnight after a stronger-than-expected report on US retail sales and comments from Federal Reserve chairman Ben Bernanke that the recession "is very likely over'' reinforced optimism on the economic recovery.
The Dow Jones Industrial Average gained 56.61 points, or 0.59 per cent, to 9683.41 as the stock market posted its sixth gain over the past seven sessions.
The tech-dominated Nasdaq composite added 10.86 points, or 0.52 per cent, to 2102.64 and the Standard & Poor's 500 index increased 3.29 points, or 0.31 per cent, to 1052.63.
New York's main contract, light sweet crude for October delivery, gained $US2.07 to finish at $US70.93 a barrel overnight, after two daily declines.
On the Sydney Futures Exchange, the September share price index contract rose 48 points to 4595, on a volume of 30,514 contracts.
