The benchmark S&P/ASX 200 surged 105.7 points to 4,348.2 after European Union leaders agreed to boost their bailout fund in a sweeping debt fix plan which will also see banks take a 50 percent loss on their Greek debt holdings.

Analysts described the afternoon as a "buying frenzy" led by resources stocks, with Anglo-Australian miner BHP Billiton rallying almost four percent and Rio Tinto gaining 4.14 percent.

The Australian dollar traded solidly throughout the trading halt and was fetching 105.27 US cents when the stock market opened, up from 103.72 US cents late Wednesday and its highest level since early September.