Australian shares have lifted on the back of strong performances across the materials sector.

BHP Billiton and Rio Tinto both rose by more than 1.5 per cent, giving a solid push to the overall share market.

IG market strategist Evan Lucas said the resources sector was helped by iron ore prices being on the way up.

“A lot of people are really starting to listen to the story coming out of China,” Mr Lucas told AAP.

“In addition, reporting season for the production side has been relatively strong with BHP’s numbers on Tuesday expected to be quite strong.”

Investors in resource stocks were also cheered by the carbon tax being abolished by the Senate.

The big miners all added more than 1.5 percentage points with Fortescue lifting 15 cents to $4.73, Rio Tinto climbing $1.15 to $65.09 and BHP rising 61 cents to $38.86.

Woodside Petroleum gained 41 cents to $42.03 after reporting a double-digit rise in sector quarter production levels and sales.

Mount Gibson Iron added 3.5 cents, or 5.11 per cent, to 72 cents after recording positive production data.

The big banks were nearly all in the green with ANZ lifting 11 cents to $33.26, NAB up 10 cents to $34.08 and Commonwealth Bank climbing seven cents to $81.42.

Westpac was the lone hold out, falling 17 cents to $33.72.

Telstra hit a new record high of $5.44.

David Jones remains in a trading halt pending a Federal Court hearing over South African company Woolworths Holdings’ $2.2 billion takeover bid.

KEY FACTS

* At 1200 AEST on Thursday, the benchmark S&P/ASX200 index was 26.6 points, or 0.48 per cent, higher at 5,545.5.

* The broader All Ordinaries index was up 27.3 points, or 0.5 per cent, at 5,531.8.

* The September share price index futures contract was 21 points higher at 5,495 with 14,088 contracts traded.

* National turnover was 1.2 billion securities worth $2.8 billion.