The Australian share market has surged amid renewed optimism about a possible US-Chinese trade deal.

The benchmark S&P/ASX200 index was up 53.6 points, or 0.80 per cent, to 6,778.2 points at 1200 AEST on Wednesday, while the broader All Ordinaries was up 52.3 points, or 0.77 per cent, to 6,864.8 points.

Telecommunications shares were leading gains, collectively adding 1.39 per cent, as every sector of the ASX moved higher.

Telstra was up 1.18 per cent to $3.855, TPG rose 1.42 per cent to $6.795, Speedcast added 3.13 per cent at $1.975 and Vocus gained 2.29 per cent to $3.13.

Mining giant BHP was up 0.79 per cent to $41.91, Rio Tinto was up 0.82 per cent to $103.60, and Fortescue Metals was up 0.97 per cent to $8.865.

All of the big four banks gained, with ANZ up 0.77 per cent to $27.64, Commonwealth up 0.45 per cent to $81.92, NAB up 1.17 per cent to $28.185, and Westpac up 1.65 per cent at $28.38.

Macquarie was up 0.14 per cent to $129.065 despite being singled out by the prudential regulator as one of three banks that needed to tighten their funding arrangements to make sure funds cannot be withdrawn by their parent companies in the event of financial stress.

Elsewhere, Pacific Energy soared 36.46 per cent to $98.25 after the power station operator agreed to be acquired by a subsidiary of Brisbane-based QIC Private Capital.

Bloomberg reported overnight that US trade representative Robert Lighthizer will travel to Shanghai next week for face-to-face talks with Chinese officials in a bid to ease tensions.

The local currency tumbled against the US dollar on Wednesday morning after Westpac analysts forecast the Australian central bank would cut interest rates to 0.50 per cent by February.

The Aussie dollar is buying 69.80 US cents from 70.21 US cents on Tuesday.