The local bourse has rallied for a third time in the last four days as a buying spree on bank stocks continued amid hopes for a V-shaped recovery.

The S&P/ASX200 benchmark index moderated its gains after being up as much as 2.5 per cent around midday to finish Thursday ahead by 76.1 points, or 1.32 per cent, at 5,851.1 points, while the All Ordinaries index rose by 72.9 points, or 1.24 per cent higher, at 5,957.8.

One Australian dollar was buying 66.28 US cents, down from 66.44 US cents at the close of trade on Wednesday.