Buyers rush back on news from Greece

Global markets also rallied overnight on news of the European Central Bank's surprise announcement of quarter-percentage-point cut in interest rates, while stronger commodity prices helped lift mining and oil stocks.

The S&P/ASX 200 Index closed up 109.3 points, or 2.62 per cent, at 4281.1.

IG Markets institutional dealer Chris Weston said it was encouraging that the Greek debt issue was being dealt with but the devil was in the detail.

"How are they going to do this?" Mr Weston said.

"Greece has no growth policies out there at all. It's all about austerity.

"At what stage do Italy, Portugal and Ireland ask for 50 per cent [debt] write-offs as well?"

Turning to the US, Mr Weston said investors had heightened expectations of positive non-farm payroll figures last night.

"All the leading indicators that we've seen for non-farms suggest that we're going to get a good number tonight," he said.

Mr Weston said there was only modest selling in response to the Reserve Bank yesterday lowering its inflation outlook and warning that Australia's economy might be dragged down by Europe's sovereign debt crisis.

"The market was pretty well prepared for that," he said. "It's one of the reasons they cut [interest] rates on Tuesday."

Among the big miners, Rio Tinto was up $3.52, or 5.3 per cent, at $69.97, BHP Billiton advanced $1.41, or 3.9 per cent, to $37.95 and Fortescue Metals jumped 37?, or

7.9 per cent, to $5.08.

Woodside rose 47? to $36.67 and Santos was up 44?, or 3.5 per cent, at $13.12.

The big four banks were all stronger, Westpac rising 57? to $22.08, ANZ 53? to $21.02, Commonwealth $1.02 to $49.03 and NAB 52? to $25.19.