Higher base and precious metals prices and another lift in the oil price also buoyed local resource stocks.
At 10:17 (AEDT), the benchmark S&P/ASX200 index was up 64.8 points, or 1.35 per cent, at 4857.6, while the broader All Ordinaries gained 61.5 points, or 1.28 per cent, to 4863.3 points.
On the Sydney Futures Exchange, the December share price index contract was 50 points higher at 4859, on a volume of 6357 contracts.
Local banks were higher, with ANZ gaining 33 cents to $24.06, NAB increasing 64 cents to $31.52, Westpac up 39 cents at $26.69, and Commonwealth Bank gaining 88 cents to $55.39.
The big miners also were higher, with BHP Billiton up 57 cents at $39.65 and Rio Tinto up $1.15 at $65.80.
IG Markets analyst Ben Potter said the local market had opened stronger following another rally on overseas markets.
"We had a very positive lead from the US," Mr Potter said.
"Sentiment heading into the Australian open was very positive."
Better-than-expected quarterly earnings and revenues from US companies, such as newspaper publisher Gannett, chip maker Texas Instruments and Apple, had boosted investors' optimism, he said.
"They're really pointing to a strong consumer demand, which a lot of people have been saying was the weak point in the whole recovery."
At 10:42 (AEDT), the retail sector mostly was stronger, after supermarket operator Woolworths posted first quarter sales up 4.2 per cent in the first quarter of 2009/10, and by 7.4 per cent excluding petrol.
Wesfarmers was up seven cents at $26.11, JB Hi-Fi had lifted 15 cents to $20.66, and David Jones had gained three cents to $5.78.
Shares in Woolworths were down 52 cents, or 1.7 per cent, at $30.00.
Mr Potter said the market had been expecting Woolworths to post five per cent growth in group sales.
US stocks rose overnight, sending all three major indices to their highest closes in more than a year, as investor sentiment got a boost from another batch of surprisingly strong corporate profits.
The Dow Jones Industrial Average gained 96.28 points, or 0.96 per cent, to settle at 10,092.19.
Stocks appear headed to sharply higher openingEnergy stocks keep sharemarket positive
