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Christmas has come late for the Australian share market, with a Santa rally lifting the S&P/ASX200 index to its biggest single-day gains in over two years.

The benchmark index closed up 103.4 points, or 1.88 per cent, to finish at 5597.2 at 1615 AEDT.

Gains in the final hour of trading pushed the index over its previous biggest day of the year, December 3, when it gained 1.86 per cent.

It was the biggest daily percentage jump since November 10, 2016, when the index gained 3.34 per cent.

The index is still down 2.7 per cent on the month, however.

The broader All Ordinaries was up by 102.5 points, or 1.84 per cent, to close at 5562.1.

The gains came across the board, with financials up 1.77 per cent and the metals and mining sector gaining 1.72 per cent.

“Obviously the question everyone’s asking is, is this sustainable, a tremendous buying opportunity, or a snap back after very oversold conditions?” said Chris Weston, head of research with Pepperstone Group in Melbourne.

He was encouraged by the strength of the market late in the day and similar gains in Asia but said the light volume was “not brilliant”.

It would take a few more days of gains and higher oil prices before anyone could say there had been a market reversal, Mr Weston said.

The biggest gainer, percentagewise, was metal mining company Ausdrill, which was up 8 cents, or 7.37 per cent, to $1.165.

Health care company CSL gained $6.03, or 3.38 per cent, to finish at $184.29.

Woodside Petroleum was up $1.24, or 4.16 per cent, to $31.06, after the Perth company said it had hired US engineering firm Bechtel to design a second LNG production train at its Pluto plant in the Pilbara.

BHP closed up 65 cents, or 1.94 per cent, to $34.15, while Afterpay was up 71 cents, or 6.06 per cent, to $12.42, as shoppers headed to sales.

The Australian moves mirrored similar gains overseas. The Dow Jones Industrial Average soared more than 1000 points for the first time ever, while the NASDAQ gained 5.84 per cent.

Oil prices gained, with West Texas crude selling for $46.61, up $4.08, or 9.59 per cent.

The Aussie edged lower, buying 70.55 US cents, down from 70.68 on Wednesday.

ON THE ASX:

* The benchmark S&P/ASX200 index was up 103.4 points, or 1.88 per cent to 5,592.2

* The All Ordinaries was up 102.5 points, or 1.84 per cent, at 5662.1.

* At 1415 AEDT, the SPI200 futures index was down 32 points, or 0.58 per cent, at 5521.

CURRENCY SNAPSHOT AT 1415 AEDT:

One Australian dollar buys:

* 70.55 US cents, from 70.68 on Wednesday

* 78.35 Japanese yen, from 78.72

* 61.99 euro cents, from 62.25

* 55.75 British pence, from 55.95

* 104.97 NZ cents, from 105.03

GOLD:

The spot price of gold in Sydney at 1415 AEDT was $US1,268.63 per fine ounce, from $US1,271.80 on Wednesday.