A tentative bounce on Wall Street and a surprise takeover bid for David Jones triggered a surge of buying interest that drove the Australian share market to a near six-year high.
The S&P/ASX 200 index rosed steadily throughout the session to close 53.2 points, or 0.98 per cent, up at 5463.8 on volume 26 per cent above average as the domestic market turned its recent outperformance into a solid gain.
Overnight the S&P 500 index bounced 0.4 per cent and the Nasdaq index climbed 0.8 per cent, but domestic investors weren't hanging about to see if US markets could extend the bounce.
After the US close, Alcoa kicked off the US quarterly earnings season by beating earnings forecasts with some help form accounting adjustments, but its earnings of 9ï¿½ a share was less than half the 20ï¿½ forecast a year ago.
The Shanghai composite index got off to a solid start but faded to trade slightly lower at the close of the ASX as stimulus hopes waned.
In Tokyo the Nikkei index fell 2 per cent as the yen rallied on broad US dollar weakness.
The Australian dollar leapt US0.4c to US93.80Â¢ after another 2.3 per cent surge in mortgage finance that traders suggested would force the Reserve Bank to raise rates.
Australian government bond yields, however, reflected little concern of a rate hike as 10-year yields dropped 2.5 points to 4.064 per cent.
Overnight US 10-years edged down 2 points to 2.67 per cent indicating an ongoing preference for safe-haven assets.
"Incoming US data is patently failing to support the US dollar or bond yields," National Australia Bank global head of currency strategy Ray Attrill said.
"In general, while the incoming data is suggesting the economy is picking up from the weather-related weakness earlier in the year, there is not yet compelling evidence that growth is accelerating to the 3 per cent 'trend' level that we continue to expect will (eventually) bring about a firmer US dollar tone," Mr Attrill said.
Following its $US12 leap late yesterday gold was steady at $US1312 an ounce, while copper slipped 0.4 per cent to $US6665 a tonne and spot iron ore was up 0.9 per cent at $US118.20 a tonne.