The local sharemarket rose strongly on the back of an overnight surge in US stocks, withstanding an afternoon fade-out that erased some of the day's gains.
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US stocks rallied, giving the Standard and Poor's 500 Index its biggest gain since October 2013, as energy shares rebounded and the Federal Reserve said it will be "patient" on the timing of interest-rate increases - a subtle hint that the US central bank will not rush into its first interest-rate increase in seven years, which markets believe will happen mid-2015.
The S&P 500 rose 2 per cent to 2,012.8, after plunging for three sessions. The Dow Jones gained 287 points, or 1.7 per cent, to 17,355.9.
Locally, the All Ordinaries rose 1 per cent to 5191.39 while the ASX200 lifted 1 per cent to 5213.10.
"The market went up in the morning and faded away in the afternoon session," said Credit Suisse analyst Damien Boey. "The initial bounce was just following overnight leads - the S&P was up about 2 per cent - and that's basically because people interpreted the Fed's statement in an optimistic way.
"By the afternoon, people are taking a bit of time to digest that and basically it looks like there are question marks as to whether the Fed is doing the right thing."
World oil prices jumped as much as 6 per cent overnight before closing off their peaks as weeks of nearly non-stop selling abruptly halted and energy stocks followed suit.
Senex rocketed 9.52 per cent to 34.5 cents, Drillsearch soared 8.39 per cent to 77.50 cents, Woodside lifted 3.10 per cent to $36.60, Santos closed up 5.01 per cent to $7.96, Oil Search rose 4.38 per cent to $7.62, Origin lifted 1.36 per cent to $11.17, Beach Energy edged up 1.62 per cent to 94 cents, and Caltex rose 1.31 per cent to $33.29.
The big banks and miners also blasted their way higher. ANZ added 1.67 per cent to $30.98, Commonwealth Bank jumped 0.96 per cent to $81.80, National Australia Bank gained 1.21 per cent to $31.73, and Westpac strengthened 0.80 per cent to $31.58.
Transpacific have slumped 4.22 per cent to 79 cents after UBS downgraded the stock to a 'sell', citing the strong link between the company's hydrocarbon operations and the oil price.
Flight Centre shares plunged 9.05 per cent to $31.80 after the company posted a profit downgrade.
The travel agent said pre-tax profit for the full financial year may fall up to 4 per cent due to lower-than-expected sales in the local leisure travel market. It had previously predicted pre-tax profit will grow 5-8 per cent.
Shares in Woolworths edged up 0.89 per cent to $29.40 after the supermarket giant was accused of bullying suppliers into paying millions of dollars to fund a discount war, prompting the competition watchdog to examine whether the supermarket giant is in breach of competition and consumer laws. Competitor Wesfarmers rose 0.20 per cent to $40.60.
News that Fairfax Media and John Singleton's Macquarie Radio network are very close to finalising a $200 million talkback radio merger excited investors. Fairfax jumped 5.92 per cent to 80 cents and Macquarie Radio network closed 6.78 per cent higher to $1.26.
Budget jewellery retailer Lovisa has seen its shares debut at a premium after the company raised $102 million in an initial public offering. Issued at $2.00 each, the shares closed 7 per cent higher at $2.14.
