The Australian share market staged a late rally to close firmly in the black after a similar surge on Wall St and higher commodities prices overnight boosted resources and financial stocks.

The benchmark S&P/ASX200 index was up 54.3 points, or 1.4 per cent, to close at 3926.4 while the broader All Ordinaries index added 56.8 points, or 1.44 per cent, to 3992.4.

CommSec chief equities economist Craig James said the Australian bourse jumped at the open, as expected, after a spectacular late rally on Wall St on news EU finance ministers were looking to aid weak banks.

"But there's still a fair amount of caution," James said. "What we're seeing right across the globe, wherever there are profits to be made, those profits are quickly taken."

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James said there were good gains across most sectors, although consumer staples and property trusts lost ground.

Supermarket chain Woolworths was down 23c at A$24.18 while rival Wesfarmers, the owner of Coles, was 3c softer at A$30.01.

Department store chains David Jones and Myer were up 4c at A$2.88 and up 5c at A$2.07, respectively.

Oil and gas major Woodside put on A$1.29, or 4.09 per cent, to A$32.80 while Santos appreciated 48c, or 4.41 per cent, to A$11.36.

Among the major miners, BHP Billiton was up A$1.27, or 3.75 per cent, at A$35.13, Rio Tinto had advanced A$1.30, or 2.2 per cent, to A$60.30 and Fortescue had gained 19c, or 4.68 per cent, to A$4.25.

Westpac was up 47c, or 2.43 per cent, at A$19.81, National Australia Bank had gained 32c, or 1.49 per cent, to A$21.78 and ANZ had put on 19c, or 1 per cent, to A$19.17. Commonwealth Bank was steady at A$43.51.

Transfield Services was the best performing stock on the S&P/ASX100 index after it announced an on-market share buy-back. The shares closed up 16c, or 8.84 per cent, at A$1.97.

The worst performer was casino owner Echo Entertainment, which fell 9c, or 2.5 per cent, to A$3.54.

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Shares in thermal coal miner New Hope jumped 81c, or 15.31 per cent, to A$6.10 while shares in its biggest shareholder Washington H Soul Pattinson gained 99c, or 7.83 per cent, to A$13.64.

- AAP