The Australian share market is trading higher, after the US Federal Reserve decided to start winding back its stimulus program for the US economy.
Fed chairman Ben Bernanke on Thursday (AEDT) announced the central bank would reduce its $US85 billion-a-month bond-buying program by $US10 billion from January.
But the Fed also said it would keep its interest rate at close to zero for longer than previously expected.
CMC Markets chief market strategist Michael McCarthy said investors were buoyed by the Fed's move and its outlook for the US economy.
"We've clearly had a game changer overnight, with the Fed announcement of tapering," Mr McCarthy said.
"This is a judgment from those best placed to make it that the US economy - despite the government stamping on the fiscal brakes - is recovering."
On the local market at 1200 AEDT, among the big banks, Westpac had lifted 32 cents to to $30.94, ANZ had advanced 9.5 cents to $30.795, and Commonwealth Bank had risen 39 cents to $74.07.
National Australia Bank had increased 18.5 cents to $33.595 as chairman Michael Chaney warned that Australia is facing years of modest economic growth and higher jobless rates.
In the resources sector, global miner BHP Billiton gained 66 cents to $36.45, Rio Tinto was up 96 cents at $66.29, and Fortescue Metals improved 11.5 cents to $5.715.
Caltex jumped $1.84, or 10.89 per cent, to $18.74 after the fuel supplier and retailer said it expects its full year profit to be more than $300 million.
* On Thursday at 1206 AEDT, the benchmark S&P/ASX200 index was up 50.1 points, or 0.98 per cent, at 5,146.2 points.
* The broader All Ordinaries index was up 48.7 points, or 0.96 per cent, at 5,148.0 points.
* The December share price index futures contract, which expired at noon (AEDT), was 43 points higher at 5,144 points, with 10,205 contracts traded.
* The March share price index futures contract was 46 points higher at 5,133 points, with 17,711 contracts traded.
* National turnover was 733.4 million securities worth $2.78 billion.