The local share market has clawed back a small amount of its heavy losses from the past three days amid a slide in bond yields and as Israel delayed its expected ground invasion of Gaza.
The benchmark S&P/ASX200 index on Tuesday finished up 12.8 points, or 0.19 per cent, to 6,856.9, a day after closing at a 51-week low.
The All Ordinaries rose 15.6 points, or 0.22 per cent, to 7,045.6.
IG market analyst Tony Sycamore said the ASX200 was showing signs of stabilisation after its "stomach-churning three day dive" that saw the index fall 3.5 per cent to a nearly 12-month low on rising bond yields and geopolitical tensions.
US 10-year Treasury yields overnight briefly rose above five per cent for the first time since July 2007, attracting significant buying and short-covering that resulted in bond prices increasing.
Yields, which fall when bond prices rise, dropped rapidly, falling to 4.84 per cent Tuesday afternoon.
Meanwhile in the Middle East, Israel had launched more airstrikes but had not begun a ground invasion, while Hamas released two elderly woman hostages.
Mr Sycamore said while more gains might have been expected out of Tuesday's session, traders were likely being cautious ahead of Wednesday's release of third-quarter Australian inflation data expected to be crucial in determining whether the Reserve Bank hikes rates next month on Melbourne Cup Day.
RBA governor Michele Bullock will also give a speech on monetary policy in Australia at a Commonwealth Bank global markets conference on Tuesday evening.
The heavyweight mining sector was the biggest gainer on Tuesday, rising 0.9 per cent as BHP added 0.5 per cent to $43.59, Fortescue climbed 2.6 per cent to $21.35 and Rio Tinto advanced 1.6 per cent to $113.60.
Graphite miners and explorers were soaring for a second day after China over the weekend announced export controls on the electric vehicle battery component as part of a tit-for-tat trade skirmish with the United States.
Syrah Resources was up 20.3 per cent to a three-month high of 90.25c, while Walkabout Resources had added eight per cent and Renascor Resources was up 6.7 per cent.
Lynas soared 10.4 per cent to $6.70 after the rare earth miner said the operating license for its Malaysian processing plant had been extended through March 2026.
Under the extension, Lynas has agreed to invest in developing methods to remove from rare earth residue the naturally occurring radioactive material that has made the plant controversial in Malaysia.
The big retail banks finished mixed, with CBA up 0.3 per cent to $98.07, Westpac adding 0.2 per cent to $20.88, NAB flat at $28.56 and ANZ dipping 0.2 per cent to $25.18.
Zip Co gained 6.7 per cent to 32c after the buy now, pay later company said it was cash-earnings positive in the first quarter and expected to be so for the financial year.
McMillan Shakespeare rose 9.0 per cent to a four-week high of $16.42 after the salary packaging company announced that strong demand for novated leases for electric vehicles had driven higher-than-expected first quarter earnings.
The Australian dollar was buying 63.45 US cents, from 63.13 US cents at Monday's ASX close.
ON THE ASX:
* The S&P/ASX200 index finished Tuesday up 12.8 points, or 0.19 per cent, at 6,856.9.
* The All Ordinaries gained 15.6 points, or 0.22 per cent, to 7,045.6
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 63.55 US cents, from 63.13 US cents at Monday's ASX close
* 95.15 Japanese yen, from 94.63 yen
* 59.51 Euro cents, from 59.67 Euro cents
* 51.81 British pence, from 51.94 pence
* 108.60 NZ cents, from 108.36 NZ cents
