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Australian shares have pared some gains but were still up more than 2.0 per cent by noon following strong gains on Wall Street overnight.

The S&P/ASX200 benchmark index was up 146.3 points, or 2.44 per cent, at 6145.0 points at 1200 AEST on Tuesday but had risen as much as 200 points earlier.

The All Ordinaries index was 146.2 points, or 2.39 per cent higher, at 6262.7.

Gains were led by the financial sector, which surged by 4.71 per cent, followed by energy, up 4.32 per cent.

CMC chief market strategist Michael McCarthy said central bank stimulus and re-opening optimism are driving market action.

Market watchers believe the ASX gains are partly explained by its underperformance compared to global equities.

Australian equities had climbed 36 per cent since, compared to 44 per cent for the S&P 500 and 49 per cent for the Dow Jones since March 23.

St George chief economist Besa Deda said an unexpected drop in the US unemployment rate on Friday helped US equities, and Australian investors had followed. Among the big four banks, ANZ was up 5.97 per cent to $20.95, the Commonwealth Bank picked up 4.89 per cent to $72.09, NAB rose by 5.18 per cent to $20.49 and Westpac gained 5.53 per cent to $19.83. Smaller rivals Bendigo Bank and the Bank of Queensland gained more 8.0 per cent. Energy shares were up after crude oil prices crossed the $US40 a barrel mark. Santos surged 7.83 per cent to $6.20 after the Queensland government gave the final approval required for the Mahalo gas project. Origin Energy is also involved in the project in central Queensland, and its shares gained 2.73 per cent to $6.40. There were big gains for materials shares too. BlueScope Steel was up 4.0 per cent to $12.86, BHP rose 3.7 per cent to $37.67, Rio Tinto was up 3.28 per cent to $101.83 and Fortescue climbed 2.58 per cent to hit an all-time high of $14.91. Wesfarmers shares were up 0.84 per cent to $42.06 after it reported booming sales at Bunnings and Officeworks in the second half of the financial year. In health, CSL shares lost 2.21 per cent to $279.01 even as it announced the acquisition of Canadian clinical-stage biotechnology company Vitaeris for its research into treating the leading cause of rejection for transplanted kidneys. Shares in Horizon Oil sprung by 13.04 per cent to almost 8 cents after an independent review cleared the company of wrongdoing regarding a $15 million payment in Papua New Guinea nine years ago. In property, GPT Group were up 4.12 per cent to $4.44 despite reporting its seven shopping malls lost $476.7 million in book value in five months from the COVID-19 lockdowns. Overnight, the Nasdaq closed at a record high, becoming the first of the major US indexes to confirm a new bull market, while the Dow and S&P 500 also jumped on expectations for a swift recovery from a coronavirus-driven downturn. A closely-watched monthly jobs report on Friday showed an unexpected fall in the unemployment rate, bolstering views that the worst of the economic damage from the virus outbreak was over. Meanwhile, the Australian dollar has continued to climb after stronger risk appetite among investors helped it touch its highest level since July last year. It was buying 70.07 US cents at 1200 AEST, up from Friday’s close of 70.02 US cents Ms Deda said the faster than expected economic recovery was supporting this rise, as was the increase in iron ore prices after Brazil’s level of coronavirus infections would affect its production of iron ore.