Australian shares added 1.1 per cent after positive Chinese trade data boosted markets already buoyed by positive US earnings and hopes for a pick-up in local buyout deals.
Exports from Australia's largest trading partner rose 13.4 per cent last month compared with a year earlier as Japanese and emerging markets boosted demand for Chinese goods, government data showed.
The figures built on a promising start to the US earnings season with Alcoa reporting earnings overnight and spurred hopes that the global economy may start to emerge from the global economic downturn this year.
"Together with December's rebounding [manufacturing data] we think that the economy has started to stabilise, and is likely to find a soft landing in the first quarter of 2012," ANZ Bank said.
At the close yesterday, the S&P/ASX200 index was up 46.8 points, or 1.1 per cent, at 4152.2.
Markets also took heart from news of a further pick-up in private equity deals.
Shares in Pacific Brands surged to A64c after the clothing manufacturer confirmed it had received an unsolicited takeover approach from US-based private equity firm KKR.
The offer "has added a bit of spark to an otherwise lacklustre market", director of EL&C Baillieu Stockbroking Richard Morrow said.
It comes a day after Spotless Group told its private equity suitor Pacific Equity Partners that a A$743.4 million ($966.3 million) offer would be needed to obtain a unanimous recommendation from the board.
Shares in the contract cleaner ended down 0.8 per cent at A$2.35 after PEP hinted that it would not raise its offer, describing the A$711 million price tag as "highly attractive".
Property trusts also got a boost from government data showing that Australian residential building approvals rose 8.4 per cent to 11,424 units in November, above analysts' forecasts of 6 per cent.