Australian stocks remained strong at noon, led by the financial sector, after rebounding this morning from Friday's horror session.
At 1200 AEDT, the benchmark S&P/ASX200 was up 191.1 points, or 4.82 per cent, to 4153.8, while the broader All Ordinaries gained 178.3 points, or 4.53 per cent, to 4117.8.
The December share price index futures contract rose 128 points to 4182, on a volume of 23,435 contracts.
Man Financial broker Anthony Anderson said the federal government's guarantee of bank deposits had boosted investor confidence.
"There is more confidence today and that is helping hold up the market," Mr Anderson said.
"The banks and in particular CBA are doing well."
Commonwealth Bank was up $2.46, or 6.22 per cent, to $42.01, National Australia Bank lifted $1.75, or 8.41 per cent, to $22.55, and ANZ Banking Group gained $1.30, or 8.5 per cent, to $16.60.
Westpac rose $1.57, or 7.78 per cent, to $21.76 and its takeover target St George Bank climbed $2.36, or 9.37 per cent, to $27.55.
In news today, banking and insurance group Suncorp-Metway Ltd says it is assessing whether to sell its banking and wealth management operations.
Suncorp shares firmed 27 cents, or 2.91 per cent, to $9.54.
On Friday, the Dow fell 128.00, or 1.49 per cent, to 8,451.19 while the Standard & Poor's 500 index fell 10.70 or 1.18 per cent, to 899.22.
The Nasdaq composite index rose 4.39, or 0.27 per cent, to 1,649.51.
10:30 AM
The Australian share market has jumped more than five per cent in early trade, led by the banks, after the Federal Government guaranteed all deposits for the next three years.
At 1018 AEDT, the benchmark S&P/ASX200 was up 209.2 points, or 5.28 per cent, at 4169.9, while the broader All Ordinaries gained 196.7 points, or 4.99 per cent, to 4136.2.
On the Sydney Futures Exchange, the December share price index futures contract surged 144 points to 4197, on volume of 14,013 contracts, after rising as high as 4228 shortly before market open.
Prime Minister Kevin Rudd announced yesterday that the federal government would guarantee deposits of any size in Australian banks for the next three years.
The government has also guaranteed all term wholesale funding by Australian banks operating in international credit markets, and will buy a further $4 billion in mortgage backed securities, effectively pumping that money into the market through non-bank lenders.
Banking stocks surged. National Australia Bank jumped $2.25, or 10.82 per cent, to $23.05, Commonwealth Bank rose $2.51, or 6.35 per cent, to $42.06 and ANZ Banking Group increased $1.42, or 9.28 per cent, to $16.72.
Westpac climbed $1.70, or 8.42 per cent, to $21.89 and its takeover target St George Bank added $2.31, or 9.17 per cent, to $27.50.
Investment firm Macquarie Group jumped $3.24, or 11.36 per cent, to $31.76.
On Friday, the ASX200 index plunged 8.34 per cent, the biggest fall since the index was created in 1993, to finish a week in which about $188 billion of value disappeared from market capitalisation.
ABN Amro Morgans private client adviser Bill Bishop said the government's deposit guarantee had given the market a huge boost in confidence.
"They've demonstrated they're fair dinkum about this," Mr Bishop said.
"This is the first really solid move for the market to get its teeth into and it's a wonderful bounce to give people a bit of confidence."
Mr Bishop said the gain today was unlikely to be a full scale turnaround in direction.
But, "it makes a change to be able to talk about some good news".
The big miners rose, BHP Billiton up $1.71, or 6.16 per cent, to $29.45, while rival and takeover target Rio Tinto gained $5.10, or 6.99 per cent, to $78.10.
The gold miners were among the few companies to fall, after the price of the precious metal fell late on Friday. Gold for December delivery fell $US27.50, or 3.1 per cent, to settle at $US859 an ounce on the New York Mercantile Exchange.
Today, Newcrest Mining lost 41 cents, or 1.6 per cent, to $25.23 and Lihir Gold dropped eleven cents, or 4.42 per cent, to $2.38. Newmont Mining fell 12 cents, or 2.4 per cent, to $4.88.