Australian shares have enjoyed their strongest gains in three months as the resources sector rallied on a rebound in oil prices.

Bell Direct equities analyst Julia Lee said the market enjoyed an amazing end to the trading session, sending the All Ordinaries index 2.2 per cent higher to again push above 5,000 points.

“Things are looking pretty good,” she said.

“Strong gains in oil prices overnight has seen the area powering along.”.

But Thursday’s gains, the best since mid-December, could be short lived, Ms Lee warned.

“The market is close to another inflection point,” she said.

Heavily battered energy producer Woodside Petroleum rose $1.26, or 4.6 per cent, to $28.75 and Santos added 25 cents, or 7.6 per cent to $3.54.

Origin Energy gained 34 cents, or 8.7 per cent, to $4.23, even though it slashed its interim dividend and warned it could suspend dividends altogether if oil prices remain depressed.

Among the miners, BHP Billiton rose 97 cents, or 6.1 per cent, to $16.95 and Rio Tinto jumped $1.29, or 3.1 per cent, to $43.40.

Ms Lee said corporate earnings reports were proving beneficial to the market, with more positive news than expected.

Wealth management and insurance giant AMP reported a 10 per cent rise in annual profit, and its shares gained 25 cents to $5.43.

Each of the big four banks gained more than two per cent.

Penfolds maker Treasury Wine Estates reported a 42 per cent lift in half year profit, and its shares gained 35 cents to $9.10.

KEY FACTS:

* At the close on Thursday, the benchmark S&P/ASX200 index was up 109.9 points, or 2.25 per cent, at 4,992.

* The broader All Ordinaries index was up 108.7 points, or 2.2 per cent, at 5,047.1.

* The March share price index futures contract was 111 points higher at 4,949, with 37,685 contracts traded.

* The price of gold in Sydney at 1700 AEDT was $US1,209.30 per fine ounce, up $US3.10 on Wednesday’s price of $US1,206.20 per fine ounce.

* National turnover was 3.2 billion securities traded, worth $6.6 billion.