The Australian market was making gains in a surprisingly strong start in trading after a flat open had been tipped.
International markets including the US rose overnight but the ASX has been bucking overseas trends and been on a downward trajectory in recent days, led by a correction in major banking stocks.
IG market strategist Stan Shamu said investors appeared to have been given a psychological boost from that correction, returning to the banks.
"The market has really exceeded our expectations with the open, we were expecting a flat open but it has popped up a bit higher and the banks are mainly responsible for that," he told AAP.
Westpac has made the most gains, lifting 32.5 cents, or 1.05 per cent, to $31.415, ANZ shares are 27 cents higher at $31.02, Commonwealth Bank had put on 44 cents to $75.34 and National Australia Bank had climbed 28 cents to $33.45.
There has been no respite for insurance giant QBE, after more than $4 billion was wiped from its market cap on Monday with its shares falling more than 22 per cent after flagging a $250 million annual loss.
Investors continue to dump the stock, with QBE shares down 70 cents, or 5.8 per cent, at $11.30.
Australian petroleum companies were benefiting from soaring natural gas prices fuelled by north American demand.
Woodside Petroleum was up 49 cents, or 1.3 per cent, to $37.89 and Santos had increased 14 cents to $14.57.
* At 1040 AEDT on Tuesday, the benchmark S&P/ASX200 index had lifted 35.5 points, or 0.7 per cent, to 5,180.1.
* The broader All Ordinaries index gained 33.8 points, or 0.7 per cent, to 5,182.2.
* The December share price index futures contract was 33 points higher at 5,176, with 10,717 contracts traded.
* National turnover was 278.9 million securities worth $549.3 million.