MELBOURNE: Australian shares jumped 2.2 percent on Wednesday morning, tracking Wall Street and metals gains on signs of economic growth offshore despite Europe's debt woes.
Brokers have been hoping for a "Santa rally" in the lead-up to the end of the year, but did not expect Wednesday's rise to hold much steam, with Europe's debt problems still rattling investors.
"It was a great rally last night in the US Unfortunately, it didn't really have a lot of substance to it," said Justin Gallagher, head of Sydney sales trading at RBS.
Gold miners led the local charge, after gold prices climbed to their highest in nearly a week. St Barbara Mines, Kingsgate and OceanaGold all surged more than 8 percent.
Top global miners BHP Billiton and Rio Tinto both rose nearly 3 percent.
Battered retailers clawed back some losses, with bargain hunters pushing Billabong up 4.8 percent, after half the surf and skatewear retailer's value was wiped out on a profit warning this week.
Department store chain Myer rose 0.9 percent and David Jones rose 2 percent.
The benchmark S&P/ASX 200 index jumped 89 points to 4,142.1 at 0046 GMT, recouping nearly all of the past two days' losses.
New Zealand's benchmark NZX 50 index rose 20 points, or 0.6 percent, to 3,222.0.
STOCKS ON THE MOVE
Fortescue Metals jumped 3.4 percent and partner BC Iron climbed 2.5 percent after reporting their Nullagine iron ore joint venture is on track to reach a production rate of 5 million tonnes a year and export 3.5 million tonnes by June 2012.
Beadell Resources leapt 13 percent to A$0.70 after announcing a gold discovery in the Hercules prospect at its Tropicana East project in Western Australia.
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