The benchmark S&P/ASX200 index ended the day up 154.5 points, or 3.7pc, at 4335.2, building on yesterday's 5.6pc advance.

Earlier, the index had jumped 6.3pc, the largest intra-day gain in its 16-year history.

"These wild moves are just too extreme," said Keith Thompson a private client adviser at Shadforths.

"Everyone wants to get back to the gradual routine of nice moves under basis of good fundamentals rather than people having to sell and buy on kneejerk reactions."

The main propellant for today's rally was record advances overnight for the main indexes in Europe and the US, as investors took heart from trillions of dollars.

The Federal Government's announcement that it plans to pump $10.4 billion into the economy to avert a recession did little to revive the rally, with shares of major retailers sinking in afternoon trading.

Mr Thompson said he expected a similar buying pattern tomorrow.

"People with optimism will take another position and wait for another day tomorrow and do exactly the same thing."

A similar early-buying trend could emerge in share trading tomorrow, as investors jump into the market but remain wary of staying in for the full session.

"I think (the market) will start out high and filter down," Mr Thompson said.

The energy sector continued to fare the best during the day, buoyed by higher oil prices. The sub-index closed 9.6pc higher.

Crude oil extended its gains, rising $US2.49, to $US83.68 a barrel.

Financial companies also extended their advance, with the sub-index closing 3.3pc higher.

The Commonwealth Bank added $2.35, or 5.6pc, to $44.55, ANZ gained 95 cents, or 5.5pc, to $18.25, NAB jumped $1.63, or 7.3pc, to $24.03 and Westpac added 74 cents, or 3.4pc, to $22.74.

Optimism over coordianted global efforts to bolster banks helped lure investors back to the Australian dollar.

The currency surged about 3 US cents to as high as US71.21c. Against Japan's currency, the dollar was recently buying 72.64 yen, a gain of about 5pc for the past day.