The benchmark S&P/ASX 200 Index rose 38.2 points, or 0.7 per cent, to 5245.6, extending the previous session's strong gains. The broader All Ordinaries Index rose 34 points, or 0.7 per cent, to 5238.

FInancials and telecommunications underpinned the market's rise, while the energy sector was the worst performer of the day, falling 1 per cent.

Pengana Capital portfolio manager Tim Schroeders said the market was slowly changing its view on what it considers "safe" after 12 months of nervousness associated with iron ore.

"What we're seeing is a fair degree of rotation. On the one hand you had iron ore stocks being aggressively sold and oil stocks were largely perceived as a safe haven," Mr Schroeders said.

"We're probably seeing a little move back at the moment. The perception is that we're close to a bottom in iron ore."

Rio Tinto's iron ore production numbers for the September quarter recorded a 12 per cent rise on the prior year to 76.8 million tonnes, and confirmed the miner is showing no signs of backing away from its largely criticised expansion strategy.

Rio Tinto rose 0.4 per cent to $60.99, while BHP Billiton gained 1.1 per cent to $33.80. Both miners are showing no signs of lowering their iron ore supply in the near term.

Tabcorp's share price climbed on the back of announcements that included the completion of the ACTTAB acquisition and a first quarter trading update announcing group revenues were up 6.6 per cent (largely due to a very successful World Cup campaign) on the prior year corresponding period.

Tabcorp's wagering business experienced 32.1 per cent revenue growth in fixed odds products, as well as a greater than 20 per cent increase in their digital distribution channel utilisation.

"In wagering, our investment in recent years in high growth areas such as digital and fixed odds is paying off," said chief executive officer David Attenborough.

"We are achieving strong growth in these areas and the business, as a whole, has positive momentum."

The company's shares rallied 3.7 per cent to $3.61.

Telstra also saw strong gains after holding its annual general meeting on Tuesday.

Bell Potter's Charlie Aitken upgraded the share to a "buy" rating, noting the telco offers an attractive yield, is "corporately predictable" and provides superior service and mobile service coverage compared to the competition.

Mr Aitken also said Telstra was effectively a monopoly, given its competitors are "significantly weaker in every aspect of the telecommunications business."

Commonwealth Bank of Australia gained 1.8 per cent to $75.45 and Westpac Banking Corporation added 1 per cent to $32.46. ANZ Banking Group rose 0.7 per cent to $31.37, and National Australia Bank ended up 1 per cent higher at $32.54.

Telstra Corporation rose 1.7 per cent to $5.38.

Food and liquor retailers both rose with Woolworths up 1.1 per cent to $34.49, and Wesfarmers, owner of Coles, rising 0.8 per cent to $41.14

Energy was the worst-performing sector, down 1 per cent.

Atlas Iron Ltd was the worst-performing stock in the ASX 200, dropping 7.1 per cent, down 3c, at 39c.

Telecommunications was the best-performing sector, up 1.6 per cent.

ARB Corp Ltd was the best-performing stock in the ASX 200, climbing 5.3 per cent, up 65c, at $12.93.