At 12.00pm (AEST), the benchmark S&P/ASX200 index was up 70.1 points, or 1.51 per cent, at 4720.5 while the broader All Ordinaries had gained 67.7 points, or 1.46 per cent, to 4720.5.
Burrell Stockbroking associate Peter Wright said investors were getting into the market as it becomes clearer the economic situation will not turn out to be as bad as first thought.
"All the data that we are getting and what has been priced in are two very, very different things,'' Mr Wright said.
"Of the top 15 banks in the world we've got four of them ... all the bulk metal contracts are way above expectations, BHP and Rio are well placed, so that's a big proportion of the index that its hard to see a downside to.''
Resources stocks were leading the way after a good night in commodities trade overnight, he said.
BHP Billiton was up 70 cents to $39.70 and Rio Tinto had gained $1.48 to $61.66.
In the energy sector, Woodside Petroleum put on $1.98 to $52.80 as it looks set to reap some of the benefits from a new oil field discovery off Africa's west coast.
Oil Search added 10 cents to $6.50 and Santos gained 6 cents to $15.60.
Gold stocks were mixed.
Newcrest Mining up 53 cents at $35.48, Lihir gold adding 3 cents to $3.18 and Newmont was down 3 cents at $5.46.
The spot price of gold in Sydney was $US1017.60 per fine ounce, up $US1.03 on yesterday's closing price of $US1016.57.
Financial stocks were also mixed.
Commonwealth Bank added 98 cents to $49.38, NAB was up 30 cents at $28.35, Westpac rose 24 cents to $24.79 while ANZ had dropped 9 cents to $22.74.
Macquarie Group was 4.82 per cent higher at $53.67.
Telstra shares were up 4 cents to $3.28 as Fitch Ratings said the proposed Federal Government changes to the telecoms industry will have no immediate impact on Telstra's ratings.
Making news, Shareholders in trans-Tasman brewer Lion Nathan have approved a full takeover of the company by its major shareholder Japanese food and beverage firm Kirin Holdings Company.
Lion Nathan shares were up 2 cents to $11.95 at 12.13pm.
Rival Fosters had gained 2.65 per cent to $5.80.
Macquarie Airports (MAp) says its airline customers continue to face difficult economic conditions but it is seeing early signs of a recovery in air traffic.
MAp was up 3.89 per cent at $2.67.
On the Sydney Futures Exchange, the September share price index contract expired 29 points higher at 4691, on a volume of 9454 contracts.
The December SPI 200 futures contract was up 65 points to 4740, on a volume of 22,437 contracts.
