KEY POINTS:
The Australian share market leaped today after Wall Street surged overnight amid general market acceptance of the Federal Reserve's surprise interest rate cut on Tuesday.
At the close, the S&P/ASX200 index was up 168.1 points, or 3.11 per cent, to 5,580.4 and the All Ordinaries lifted 160.2 points, or 2.94 per cent, to 5,605.8.
On the Sydney Futures Exchange the March share price index futures contract was up 164 points, or 3.03 per cent, to 5,543 on 37,222 contracts.
Bell Potter senior adviser Stuart Smith said the market had a strong day, with "respectable" trading volumes.
"The market is strong across the board, with a couple of exceptions," he said.
"We sort of fell over each other this morning trying to get in the queue to buy stock, so that shows there is potential pent-up demand. But I'm still seeing volatility in the short term."
Mr Smith said volatility was necessary for what he viewed as the "accumulation phase" of the market.
"That's where people still throw stock into the middle of the ring and people come in and pick it up and run it back up the hill again.
"That's where we are preparatory to the next bull run.
"It takes several months, but it's all good, the market is way under fair value."
The big miners closed stronger, with BHP Billiton up 93 cents, or 2.74 per cent, to $34.82 and Rio Tinto up $2.46, or 2.32 per cent, to $108.47.
The big banks were all firmer, with ANZ Bank 80 cents higher to $26.02, Commonwealth Bank 88 cents firmer at $50.75, National Australia Bank up $1.34, or 4.13 per cent, to $33.75 and Westpac 38 cents more expensive at $25.60.
The Australian market has followed the lead from US stocks, which surge over two per cent as investors bought financial stocks on speculation that regulators would inject capital into struggling mortgage insurers.
The Dow Jones industrial average rose 298.98 points, or 2.45 per cent, to 12,270.17.
National Australia Bank today moved to distance itself from Allco Finance Group, telling the share market that it had no direct lending relationships with the besieged finance house.
Allco shares lifted 65 cents, or 29.41 per cent, to $2.86 after falling heavily yesterday when a major shareholder received margin calls.
Centro Properties Group shares added 12.5 cents, or 35.21 per cent, to 48 cents, after the new boss of the troubled group said he was not expecting to sell assets of the firm at this time.
At 1624 AEDT, the spot price of gold in Sydney was US$890.75 per fine ounce, up US$1.25 from Wednesday's close of US$889.50.
The gold producers were mixed, with Newcrest Mining dropping 90 cents to $34.00, Lihir Gold adding 11 cents to $3.65 and Newmont Mining down five cents to $5.90.
Newcrest said it had maintained its production guidance for the full year after reporting output rises of two per cent for gold and copper in the December quarter. But it also said costs were under increasing pressure at the Telfer mine in Western Australia.
Woodside Petroleum gained 40 cents to $44.50 and Oil Search firmed 14 cents to $4.34.
Santos lifted 23 cents to $12.31 after it said its annual output was in line with guidance but just under last year's record level.
Zinifex was up 94 cents to $9.88 after it said output of lead and zinc rose strongly in the first half of 2007/08.
The retail sector closed mostly stronger, with Wesfarmers up $2.21 to $37.31, David Jones up 46 cents to $4.91 and Harvey Norman adding 27 cents to $5.87.
Woolworths fell 35 cents to $29.75.
Mirvac reaffirmed its full-year distribution guidance after raising $300 million from a placement of new securities with Dubai-based developer Nakheel.
Mirvac securities were up 23 cents, or 4.75 per cent, to $5.07.
Telstra was up 20 cents to $4.51, its instalment receipts were up 22 cents to $2.98 and Optus-owner Singapore Telecommunications was up 19 cents to $3.06.
Fairfax was up three cents to $3.93, News Corp lifted $1.20 to $22.60 and its non-voting stocks added $1.14 to $22.00.
Consolidate Media Holdings added two cents to $4.31.
Takeover target Sydney Attractions Group reported a strong lift in first-half profit and reinstated its interim dividend.
The group, which has rejected an offer of $6.50 a share from Village Roadshow, also repeated annual earnings would be around $6.5 million, excluding costs related to the offer.
Sydney Attractions shares closed steady at $6.50 and Village lifted seven cents to $2.72.
The most heavily traded stock was Centro Properties Group, with 74.04 million shares changing hands, worth $33.65 million.
Preliminary total market turnover was 1.84 billion shares worth $7.45 billion, with 828 shares up, 500 down and 269 unchanged.
- AAP