The S&P/ASX200 rose 39 points on Monday, up 0.44 per cent, to 8845.7, as the broader All Ordinaries improved by 35.3 points, or 0.39 per cent, to 8975.7.
Energy stocks outperformed, the segment up more than two per cent after Middle East supply disruptions launched Brent crude as high as $US110 a barrel over the weekend.
Banks and other financial stocks continued their recovery from August's sell-off, offering something of a safe haven after artificial intelligence uncertainty sparked a sell-off in red-hot chip and technology stocks last week.
"There was a bit of a flight to safety in certain aspects, and Australia is a low-beta, more defensive value market," Pepperstone head of research Chris Weston told AAP.
"So we have some strong qualities on a day when anything to do with AI ... is getting called into question."
Mining stocks managed to end the session higher after dropping at the open, after iron ore futures inched above $US91 a tonne after China's economy grew more than expected in September.
Copper also advanced as US technology futures pointed to an incoming rebound, with BHP up 0.7 per cent to $60.43 and Rio Tinto gaining 0.4 per cent to $155.51.
Gold stocks were broadly lower as the metal's spot price hovered near $US4176 ($A5999) an ounce, with high bond yields still weighing on the investor case for precious metals.
Industrials rallied after Cleanaway shares rocketed more than 20 per cent higher following a $9.4 billion takeover bid from Swedish private equity giant EQT.
The local technology sector lost 1.3 per cent, tracking the slump in US tech stocks, while NextDC shares went into a trading halt at multi-year lows over reported delays to its Melbourne data centre electrification ramp-up.
Consumer-facing stocks and real estate trusts were also under pressure, joining technology as the only sectors in the red on Monday.
In company news, Mesoblast was the top-200's worst performer after Rynocil sales undershot analysts' forecasts, while Stockland and South32 also slumped after delivering trading updates.
Challenger was at the other end of the leaderboard, up more than 19 per cent after receiving a $7.9 billion non-binding takeover offer from  TAL Dai-ichi.
The Australian dollar is buying 69.75 US cents, up from 69.42 US cents on Friday at 5pm.
The Aussie dollar eased last week after soft jobs figures lowered the odds of a Melbourne Cup day interest rate hike, but the shift could prove premature, Global X ETF strategy analyst Joseph Marassa said.
"With oil prices persistently high and the risk of higher inflation, markets may be underpricing the chance the RBA acts again," he said.
ON THE ASX:
* The S&P/ASX200 rose 39 points, or 0.44 per cent, to 8845.7
* The broader All Ordinaries gained 35.3 points, or 0.39 per cent, to 8975.7
One Australian dollar trades for:
* 69.73 US cents, from 69.42 US cents at 5pm AEST on Friday
* 110.25 Japanese yen, from 109.56 Japanese yen
* 62.12 euro cents, from 61.85 euro cents
* 52.32 British pence, from 52.20 pence
* 123.24 NZ cents, from 122.87 NZ cents
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