On Wall Street, investors welcomed comments from the Federal Open Market Committee that economic activity in the United States was “levelling out”, as well as its decision to leave interest rates unchanged. The Dow Jones Industrial Average gained 1.3% to close at 9361.61 points.
Closer to home, local stocks closed higher for a fourth consecutive session with the benchmark S&P-ASX 200 index adding 2.1% to close at 4435.9 points, while the All Ordinaries also gained 2.1% to 4436.7 points.
“It's hard to fight the market at the moment,” RBS Head of Sydney Sales Justin Gallagher told Dow Jones Newswires.
“The market is feeling pretty comfortable that we will get through this reporting season on the upside based on the trend so far.
“Economic data is pretty good and whilst people have been cautious on the speed of recovery, the consensus now is that we are in recovery.”
On the resources front, the mining heavyweights both gained ground with BHP Billiton adding 0.71% to $38.26, while Rio Tinto gained 1.4% to $58.80.
The arrest and detention of Stern Hu and three other Rio employees is not hurting Australia's relationship with China, but could affect the way business is done with the country, a Dow Jones report quoted Australian Trade Minister Simon Crean as saying.
"Unless it's resolved expeditiously and satisfactorily it could have implications in terms of the way in which businesses see the way they do business with China," he said.
Crean added that the issue was not affecting trade flow.
Meantime, Fortescue Metals Group has requested a trading halt pending an announcement regarding "the completion of a commercial negotiation".
Earlier this week, FMG confirmed confidential talks with unnamed parties over financing transactions to fund the expansion of its Pilbara operations.
However, FMG was tight-lipped over a Reuters report that it was in advanced discussions with China’s sovereign wealth fund China Investment Corporation (CIC) over a $US1 billion convertible bond deal.
FMG was last trading 2.3% higher at $4.45 before entering the trading halt.
Base metals on the London Metal Exchange rebounded overnight. Three-month copper led the charge, adding 2.5% to close at $US6190 per tonne.
National Australia Bank analyst Ben Westmore told Dow Jones fundamentals were "reasonably weak" but strong imports of copper and improving economic news in Japan and the US were helping metals.
He added that the biggest risk to base metals was underlying demand from China and tentative signs of recovery from Japan and elsewhere fizzing out.
Nickel gained 0.8% to close overnight at $19,650/t, while zinc added 2% to $1851/t.
Gold hasn’t enjoyed the same strength as base metals with the spot price trading 0.5% higher at $951.50 per ounce at 4pm AEST.
Of the gold miners, Newcrest Mining fell 0.1% to $A29.50, Lihir Gold shed 0.8% to $2.62 and Sino Gold Mining dipped 0.7% to $5.73.
One of the big movers by percentage today was Reed Resources which announced a move into the lithium market with the signing of an option agreement to purchase the Mount Marion lithium project in Western Australia’s Goldfields region.
Reed hit an intraday high of 47c, before closing the session 80% higher at 46c with more than 4.4 million shares changing hands by the final bell.
