The S&P/ASX200 rose 37.4 points, or 0.43 per cent, to 8,810.9 on Monday, as the broader All Ordinaries gained 40.9 points, or 0.45 per cent, to 9,102.1.
The top-200 spiked in early trading following a strong Friday finish from Wall Street, but handed back roughly half the early gains over the session.
"We rallied a quick 72 points up about 0.8 per cent early in trading, but we have seen the market ease back towards that 8800 level this afternoon, which has acted like somewhat of a magnet for the majority of this month," IG Markets analyst Tony Sycamore told AAP.
The local bourse's recent relative underperformance could soon work in its favour as fund managers looked to rebalance their portfolios at the end of the month.
"After three weeks of declines, the ASX 200 is standing out as a market that can benefit from rebalancing into month end. They'll sell their winners and buy the (recent) losers," Mr Sycamore said.
As six of 11 local sectors closed in the green, materials stocks were the clear winners, jumping more than two per cent as commodity prices underpinned strength in large cap iron ore miners, gold miners and uranium plays.
Fortescue rallied 3.2 per cent, Rio Tinto jumped 2.6 per cent, and BHP pushed one per cent higher, as China's state-run iron ore trader urged domestic mills to avoid one of BHP's popular products.
Gold miners were among the top-200's best performers, with Genesis Mining rocketing 13.7 per cent, while bigger players like Northern Star (+8.2 per cent) and Evolution (+6.3 per cent) also shined.
The precious metal has again broken its all-time high to trade hands near $US3,720 ($A5,646) an ounce.
Uranium-focused companies also did well, with enrichment company Silex Systems rallying 3.8 per cent, and Paladin pushing 4.6 per cent higher as smaller miner Boss Energy surged almost seven per cent to $2.04.
Financials were far less impressive, fading 0.2 per cent as CBA led three of the big four banks lower and Westpac finished roughly flat.
Energy stocks and real estate plays were the worst performing sectors, each down 0.7 per cent and tracking with drops for their respective market giants, Woodside and Goodman Group.
Bucking the trend was Santos, which pushed 0.4 per cent higher to $6.80 after getting the first gas out of its $4.7 billion Barossa gas project off the Northern Territory coast.
The Australian dollar is buying 65.88 US cents, down from 65.95 on Friday at 5pm, as the US dollar strength index continued to recover after hitting multi-year lows last week.
Looking ahead, the Australian Bureau of Statistics releases its monthly consumer price index indicator on Wednesday. Analysts expect the figure to ease to 2.6 per cent after energy rebate timing prompted hotter-than-expected numbers in July.
"There's probably not going to be too much there to shift the dial away from the expectation the Reserve Bank will cut rates in November - still fairly solidly priced at around 80 per cent (likely)," Mr Sycamore told AAP.
ON THE ASX:
* The S&P/ASX200 rose 37.4 points on Monday, or 0.43 per cent, to 8,810.9
* The broader All Ordinaries gained 40.9 points, or 0.45 per cent, to 9,102.1
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.88 US cents, from 65.95 US cents on Friday
* 97.55 Japanese yen, from 97.51 Japanese yen
* 56.09 euro cents, from 56.05 euro cents
* 48.89 British pence, from 48.83 British pence
* 112.57 NZ cents, from 112.52 NZ cents
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