There is some strength returning to world share markets with the Australian benchmark index, the All Ordinaries, up 2.1 per cent to 5090.9 after Wall St rallied to a seven week high on Tuesday night.

The strongest single day in a month saw the Dow Jones bounce 2.1 per cent to 16,865 on the back of strong manufacturing data from the US, while optimism was boosted by hopes central banks across Asia and Europe would add to stimulus.

Hopes that the US economy is gaining momentum saw the tech rich  Nasdaq surge 2.5 per cent to 4,670, and the broad market indicator, the S&P 500, gained 2.4 per cent to 1,978.

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Gains on the Australian stock market on Tuesday came after strength in futures with the ASX SPI 200 futures index jumping 1.9 per cent to 4,982 before the open. On the open the ASX 200 was up 1.4 per cent and strength built through the day.

Across Europe, in London the FTSE 100 added 0.9 per cent to 6,153, the German DAX rallied 2.3 per cent to 9,717, while France’s CAC 40 climbed 1.2 per cent to 4,407.

Locally, shares were set to follow the strong overseas leads.

On commodities markets, oil rallied overnight, with West Texas crude adding 1.9 per cent to $US34.40.

Prices rose after Russian President Vladimir Putin spoke of more “radical” measures to balance the global oil market at the same time it was pursuing a plan with Saudi Arabia, Qatar and Venezuela for a production freeze.

IG market analyst Angus Nicholson said oil seems to have found some kind of floor at $US30 a barrel and traders were keen to buy on hopes of more central bank stimulus.

“We have seen an immense risk-on rally over the past 24 hours of trade, and a lot of this does look to be underpinned by the stability that oil has found above the $US30 level over the past two weeks,” he wrote in a note.

“China announced cuts to the RRR [required reserve ratio] this week and markets are looking to the upcoming European Central Bank and Bank of Japan meetings for signs of further global monetary stimulus.”

Elsewhere, spot gold dipped 0.6 per cent to fetch $US1,232 an ounce.

The Australian dollar climbed 0.5 per cent higher to 71.8 US cents.

It was also buying 81.7 Japanese yen, 51.4 British pence, 66 euro cents and $NZ1.082.

– with ABC