The heavy weight financial and resources sector led gains.

Maquarie Group rose 2.74 percent, Toll Holdings rose 2.4 percent to A$4.66 and Santos rose 2.7 percent to A$12.66.

"Right now the optimism is strong on feeling that European leaders are obviously heading in the right direction, that should support the rhythm going forward," said Lucinda Chan division director at Macquarie Private Wealth.

US reporting season kicks off tonight and strong company results will be sought to keep positive market sentiment rolling along.

"Recently we have seen strong manufacturing data and consumer spend data out of the US. Plus the jobs numbers were quite good, so hopefully the US will also provide momentum that will drive us forward," Chan added.

The benchmark S&P/ASX 200 index rose 26.6 points to 4,227.6, according to the latest data, marking its fifth straight day of gains. The market has rallied 10 percent from last week's intraday low of 3,840.

"Spot gold in Asia has been trading quite well in Asia today, obviously gold is still a much sought after hedge in these times of uncertainty despite the fact that we are all very positive and optimistic about what is about to happen ... in Europe," Said Chan.

Spot gold prices rose on Tuesday, building on a rally of more than 2 percent overnight, gold miner Newcrest shares rose 1.5 percent to A$36.40.

Sundance Resources shares slipped 1.15 percent after announcing that a bid by Chinese firm Hanlong Mining to take over the company remains on schedule and there has been no indication that an insider trading probe at Hanlong would derail the deal.

Australian-listed uranium miner Extract Resources shares fell 1.2 percent to A$8.75 after announcing it has held talks with the nation's securities watchdog about potentially forcing a Chinese nuclear-power generator to make a takeover offer for the $2 billion company. New Zealand's benchmark NZX 50 index rose 0.7 percent to 3,396.2.