The benchmark S&P/ASX200 index closed up 95.7, or 1.3 per cent, to 7,356.9, while the broader All Ordinaries finished up 95.4 points, or 1.3 per cent, to 7,642.4.
"The main theme for today has been a much better session," said City Index analyst Tony Sycamore.
With the market having fallen 4.4 per cent over the course of three days, "we've started to see bargain-hunters come in," especially in the mining space, Sycamore said.
Sentiment was also boosted by a strong earnings report overnight from Facebook parent company Meta Platforms, whose NASDAQ-listed stock was up around 18 per cent in aftermarket trading, Sycamore said.
"That was really good fuel to start the day off."
It was the local bourse's best single-day performance since January 28, although steep losses Tuesday and Wednesday means the ASX200 is still down 1.6 per cent for the week.
The heavyweight mining sector was the biggest gainer on Thursday, rising 3.5 per cent as iron ore prices advanced for a second day.
BHP added 4.4 per cent to $48.02, Rio Tinto climbed 3.5 per cent to $112.80 and Fortescue Metals advanced 8.1 per cent to $21.73 after the iron ore giant said it expected to ship several million more tonnes of the commodity this fiscal year than previously forecast.
Coalminers rose after Russia jolted energy markets by cutting off natural gas exports to Poland and Bulgaria in retaliation for Western sanctions.
"What that means is that they're going to have to start looking for alternatives - and that means potentially coal," Sycamore said. "It means looking at things like oil as an energy replacement, and potentially LNG imports."
Stanmore Resources gained 11.4 per cent, Whitehaven Coal added 6.9 per cent and Yancoal climbed 4.0 per cent.
Zinc miner New Century Resources climbed 11 per cent, Nickel Mines added 6.1 per cent, and goldminer Resolute Mining added 3.1 per cent after all three announced solid March quarters, but Newcrest dipped 0.1 per cent despite announcing 10 per cent increase in gold production.
Silver Lake Resources sank 6.3 per cent to a two-month low of $1.875 after the WA-based goldminer withdrew its guidance, saying intensifying COVID-19-related labour shortages and supply chain issues made this quarter's operating performance tough to predict.
Still, every sector was in the green except for telecommunications, which was down 0.2 per cent.
The big banks were mostly up, with ANZ rising 0.7 per cent to $27.09, Westpac advancing 0.6 per cent to $23.59 and CBA gaining 0.2 per cent to $103.23. NAB was basically flat at $32.19.
AMP soared 13.2 per cent to a five-month high of $1.16 after agreeing to sell its international infrastructure equity business to US-based Drawbridge Group for up to $699 million. The wealth advisor said it would return most of the funds to shareholders.
Coles Group added 0.6 per cent to $18.47 after the supermarket chain said that March quarter sales were up 3.9 per cent to $9.3 billion, even as flooding in NSW and Queensland forced the temporary closure of 130 stores. Rival Woolworths added 0.6 per cent to $38.13.
Mirvac added 0.4 per cent to $2.39 after the builder said it had navigated challenges from COVID-19 and wet weather to sell 2,332 residential lots during the March quarter, up from 2,282 a year ago.
Washington H Soul Pattinson gained 3.2 per cent to $27.46 after the investment house agreed to sell its zinc and copper mining business, Round Oak Minerals, to a junior miner for $234 million in cash and scrip.
Aeris Resources called it a "transformational acquisition" that would make it Australia's next mid-tier base and precious metals producer. Aeris shares were in a trading halt as it sought to raise $117 million.
The Australian dollar had sunk to a two-month low of 71.30 US cents, from 71.71 US cents at Wednesday's close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished up 95.7 points, or 1.3 per cent, to close at 7,356.9 on Thursday.
* The All Ordinaries index gained 95.4 points, or 1.3 per cent, to 7,547.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 71.30 US cents, from 71.71 US cents when the ASX closed on Wednesday
* 92.90 Japanese yen, from 91.73 yen
* 67.77 Euro cents, from 67.48 cents
* 56.94 British pence, from 56.99 pence
* 109.37 NZ cents, from 109.08 NZ cents.
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