Most sectors were up across the board with strong gains recorded in agricultural commodity prices.

Shares in BHP Billiton were up 82c to $46.02, while Rio Tinto jumped $1.91 to $87.10, Fortescue Metals Group gained 9c to $6.81, OZ Minerals was up 4c to $1.74 and Paladin Energy climbed 16c to $5.36.

Big movers of the day were Sovereign Metals, Strategic Minerals Corporation and Ausgold.

Shares in Sovereign jumped 36.7% or 11c to 41c on no news, while Strategic shares gained 23.2% or 0.7c to 4c, and Ausgold increased by 26.9% or 35c to $1.65, both off the back of exploration results.

The benchmark S&P/ASX 200 index was up 71 points or 1.50% to 4795.20, while the broader All Ordinaries was up 69.60 points to 4901.50.

On Wall Street, the Dow Jones Industrial Average gained 83.56 points or 0.72% to 11,755.44 points and the S&P 500 index jumped 11.48 points or 0.90% to 1285.96.

Reports emerged today that the flooding crisis may force the Reserve Bank of Australia to accept higher inflation in coming months as commodity and food prices soar.

“At a time when the economy does not have a lot of spare capacity and a mining and energy investment boom is also expected over the next few years, the RBA will face an even greater challenge to manage medium-term inflation pressures,”Bloomberg quoted Sydney-based Citigroup economist Paul Brennan.

A Singapore-based economist at TD Securities Inc was quoted by Bloomberg in a note to clients as saying: “We have pushed out our expectation for the RBA to resume tightening monetary policy to April or May from a previous call of March”

The dollar was also trading higher this afternoon, despite pulling back earlier in the day on weaker than expected employment figures.

At the time of market close (4.20pm AEST) it was fetching US99.51c, up 1c from US98.51c yesterday.

The Australian Bureau of Statistics also released the country’s unemployment rate for December, which was a seasonally adjusted 5% last month, compared with an unrevised 5.2% in November.

Total employment rose by 2300 to 11.417 million in the month, seasonally adjusted.

As for spot gold, it was down $US2.03 at 4.20pm (AEST) to $1385.82 an ounce, while shares in Australia’s largest locally owned gold producer, Newcrest Mining, gained 26c to $39, Kingsgate gained 7c to reach $10.66, and AngloGold Ashanti shed 30c to $9.06.

As for commodities traded on the London Metal Exchange, all were up overnight as the US dollar weakened against the euro. Nickel was again the biggest mover.

Nickel for three-month delivery gained 4.45% to close at $US25,800 per tonne, while zinc added 3.1% to $2479/t and copper finished 1.9% higher at $9690/t.

Lead climbed 2.5% higher to $2661/t, while tin rose 1.8% to $27,035/t and aluminium gained 0.3% to $2505/t.