SYDNEY: Australian stocks rose 3 percent on Thursday as investors were comforted by stronger-than expected U.S data and news that European finance ministers agreed to safeguard struggling banks.
Commodity prices rose on the encouraging US data and a weaker dollar, bolstering Australian miners such as BHP Billiton and Rio Tinto . BHP rose 3 percent to A$36.19 and Rio soared 4.4 percent.
The big miners had been hammered in recent days with Rio falling to a 2-year low on worries the global turmoil and a looming Chinese slowdown would derail the commodities boom.
The S&P/ASX 200 index was up 118.61 points to 4,045.10 points by 0151 GMT, adding to the 1.4 percent climb on Wednesday.
"It all just came together like a jigsaw puzzle. Today one sees confidence in the market after recent lows," Stuart Smith, a private client adviser at Bell Potter Securities.
Global stocks and oil prices surged on Wednesday on optimism European authorities are moving to prop up the region's banking sector and after US data showed the economy is still growing, albeit slowly.
New Zealand's benchmark NZX 50 index rose 0.4 percent to 3,341.54.
STOCKS ON THE MOVE
* Stocks that had been pummelled over the last few weeks such Karoon Gas and Paladin Energy soared as investors felt the selloff was overdone.
Karoon jumped 13 percent to A$3.14 and Paladin was up 13.7 percent at A$1.33.
Top banks rose with largest lender National Australia Bank leading with a 3.6 percent rise. Investors viewed the move by the European authorities as positive for the banks that rely on offshore markets for funding.
Australian contractor WorleyParsons climbed 4 percent after announcing late on Wednesday it had won a construction and management services contract for a major Australian coal export terminal.
Woodside Petroleum rose 3.5 percent to A$33.92 as oil prices climbed.
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