Australian shares have risen to a month high as an upbeat start to the US earnings season and hopes of further monetary easing in China sparked a rally in global stocks.
Wall Street notched up more gains on the growing belief that the world's largest economy is on the road to recovery and the Shanghai Composite jumped on hopes that Beijing may soon move to support the China's slowing economy.
Europe took a back seat after news that ratings agency Fitch likely will not downgrade France and a well-received debt auction from Greece calmed immediate fears of contagion from the region's debt crisis.
"People are starting to realise things aren't as bad as everyone thought they were," Wilson HTM senior wealth manager Simon Robinson said.
"The world's largest economy is now starting to turn a corner.
At 1036 AEDT on Tuesday, the benchmark S&P/ASX200 index was up 46.5 points, or 1.1 per cent, at 4,198.7 - it's highest point since Dec 14 - while the broader All Ordinaries index was up 45.1 points, also 1.1 per cent, at 4,251.7.
On the ASX 24, the March 2012 share price index futures contract was 52 points higher at 4,174, with 11,508 contracts traded.
Materials stocks led the market higher, adding 1.5 per cent in early trade as commodity prices rose over night on the back of renewed optimism for global growth prospects.
BHP Billiton gained 1.8 per cent to $36.29 and Rio Tinto rose 1.8 per cent to $64.32.
Perversely, brokers said that many investors see data showing a market slowdown in Chinese trade in December as positive for commodity prices as the government is now more likely to cut interest rates to spur growth.
"As China's growth moderates towards eight to nine per cent that's much more sustainable as you don't want bubbles developing," he said.
"The fact that we haven't seen a collapse in commodity prices either makes resources stocks very atractive and you can get exposure very cheaply right now."
The big four banks also pushed higher on the back of strong leads from their US contempoaries. Westpac led the pack, adding two per cent to $20.60.
Commonwealth Bank was the weakest of the big financials, rising only 0.7 per cent after the Australian Securities and Investments Commission on Tuesday said a former adviser at the bank's Commonwealth Financial Planning Ltd business failed to meet obligations as an adviser, raising the question of CBA's liability for payments to customers.
News that Brambles, the world's top pallet supplier, received first offers from private equity groups for its US document management business valued at more than $US2 billion ($A1.94 billion) is also adding to hopes for more deals this year.
Brambles gained 0.4 per cent to $7.26.