The benchmark S&P/ASX200 index on Tuesday rose 64.5 points, or 0.78 per cent, to 8,314.0, while the broader All Ordinaries gained 64.6 points, or 0.76 per cent, to 8,558.6.
"It appears the Santa Claus rally has officially kicked off for 2024, right on cue in mid-December," said IG market analyst Tony Sycamore, who last week correctly predicted the ASX200 would pull back to near 8,200 after it fell through support at 8,350 (it dropped to 8,236.7).
Mr Sycamore has turned bullish, predicting further gains into the year's end.
That would fit a traditional pattern to a tee.
December is seasonally a strong time for equities, but there's typically some weakness towards the start of the month and a rally into the holidays.
The ASX200 closed Tuesday still down 1.45 per cent for the month, having fallen two per cent over its five-day losing streak.
Capital.com analyst Kyle Rodda called Tuesday's rally unexpected but overdue and said there had been no discernible catalyst behind the move.
Whatever the reason, eight of the ASX's 11 sectors finished higher, with materials, utilities and energy lower.
The industrials, tech and property sectors were tied as the biggest gainers, each climbing 1.3 per cent.
Realestate.com.au owner REA Group rose 2.6 per cent, ResMed climbed 2.2 per cent and Pro Medicus added 2.6 per cent.
All of the big four banks finished higher, with ANZ rising 0.8 per cent to $29.42, Westpac growing 0.7 per cent to $32.64, NAB climbing 1.5 per cent to $38.19 and CBA advancing 1.6 per cent to an all-time high of $161.13.
Elsewhere, Pexa Group rose 8.2 per cent to a one-month high of $13.33 after the property settlement platform appointed an executive of the tech company Grab as its next CEO.
In the heavyweight mining sector, BHP dropped 0.3 per cent to $40.24 while Fortescue fell 0.4 per cent to $18.67 and Rio Tinto edged 0.1 per cent lower at $118.51.
In the tech sector, Data#3 dropped 9.8 per cent to a two-year low of $6.69 after the IT solutions provider said late on Monday Microsoft was restructuring its partner incentives for services that Data#3 resells, potentially costing it income.
Novonix grew 3.4 per cent to 60.5 cents after the US Department of Energy committed $US754.8 million ($1.2 billion) to finance the battery metal company's proposed new synthetic graphite facility in Chattanooga, Tennessee.
In the energy sector, Karoon Energy fell 9.7 per cent to a three-year low of $1.26 after the oil and gas producer downgraded guidance, citing the impact of Hurricane Rafael in the Gulf of Mexico and a mooring issue at its floating oil platform off the coast of Brazil.
Data centre rollup Digico had its first day of gains after making its debut on the bourse on Friday. DGT shares rose 7.2 per cent to $4.61, still below its IPO price of $5.
Food and beverage company SPC Global Holdings returned to the bourse on Tuesday following a nearly two-decade absence that followed its acquisition by Coca-Cola Amatil in 2005.
The company now includes SPC, the Original Juice Company and Nature One Dairy. Its share finished at $1.315, down 12.3 per cent from the $1.50 price of the initial offering that raised the firm $2.4 million.
The Australian dollar had weakened further against the greenback, buying 63.53 US cents, from 63.71 US cents at Monday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Tuesday gained 64.5 points, or 0.78 per cent, at 8,314
* The broader All Ordinaries rose 64.6 points, or 0.76 per cent, to 8,558.6
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 63.53 US cents, from 63.71 US cents at Monday's ASX close
* 97.92 Japanese yen, from 97.88 Japanese yen
* 60.47 euro cents, from 60.58 euro cents
* 50.12 British pence, from 50.43 pence
* 110.17 NZ cents, from 110.26 NZ cents
24°C