The sharemarket rose this morning, with consumer staples and financials leading a broad-based recovery following lower-than-expected US jobless claims data.
At 11.30am AEDT, the benchmark S&P/ASX200 was up 1 per cent at 5081.9 points. The index yesterday fell 1.2 per cent to a seven-day low of 5032.2, following Tuesday's rise to a 4 1/2 year high of 5163.5.
Major banks rose 0.9 per cent to 1.6 per cent after steep falls yesterday.
Pallets maker Brambles rose 2.6 per cent amid mounting signs of a US economic recovery.
Consumer staples were also strong, with Woolworths, Wesfarmers and Metcash up 1.5 per cent to 1.6 per cent.
"The sell-off was overdone yesterday," said Macquarie Private Wealth investment adviser James Rosenberg.
"There is still a lot of interest in stocks, but there's a lot of caution as well. People are substantially more comfortable with risk and risk assets, but a lot of people think it's run a bit hard."
Mr Rosenberg said investors should be encouraged by recent signs of recovery in the domestic and US economies, and a draft statement from European leaders suggesting they may give countries such as France, Spain and Portugal more time to lower fiscal deficits.
US weekly jobless claims fell to 332,000, versus 350,000 expected by economists. The data prompted a rise 0.6 per cent in the S&P500 to a 5 1/2 year high of 1563.2.
Europe's STOXX600 rose 1.1 per cent after European leaders meeting in Brussels called for an "appropriate mix of expenditure and revenue measures".
Materials stocks initially lagged the broader market after spot iron ore fell 4.4 per cent to $US132.90 a tonne overnight. However, iron ore miners including BHP Billiton, Rio Tinto and Fortescue Metals recovered to be up 0.6 per cent to 0.9 per cent after steep declines yesterday.
