The S&P/ASX200 rose 10.3 points by midday, up 0.12 per cent, to 8,575.5, as the broader All Ordinaries gained 7.6 points, or 0.09 per cent, to 8,874.
The move followed a skittish overnight session for global equities as risk sentiment soured on the back of speculation of higher interest rates in Japan and weaker-than-expected US factory activity in November.
"December has kicked off on shakier footing as a risk-off tone permeated through markets, with a sharp sell-off in crypto being met with a fall in equities across the US and Europe," Westpac economist Ryan Wells said.
Energy stocks outperformed the broader market, up 1.3 per cent and tracking with gains in oil, gas and coal stocks, as well as uranium plays.
The heavyweight materials sector also traded higher, as large miners continued to grind higher with iron ore futures holding their ground above $US106.50 a tonne.
Gold stocks were mostly in the green, with Northern Star, Evolution and Newmont up less than 0.8 per cent each as the precious metal held relatively steady at $US4,227 an ounce.
Pantoro Gold was the top-200's worst performer, tumbling 9.1 per cent after Tulla Resources unloaded 25.8 million shares of the miner's shares in order to fund other projects. Tulla remains a significant shareholder and owns more than six per cent of Pantoro.
South32 jumped 1.5 per cent after naming Boston Consulting Group's Geoff Healy as an independent non-executive director, while lithium play Pilbara Minerals gained a similar amount after flagging Alinta Energy chair Robert Nicholson will join its board in January.
Lynas Rare Earths was the top-200's best performer with a 2.5 per cent lift.
Financial stocks traded roughly flat as the big four banks edged higher, counterbalancing weakness elsewhere in the sector.
Australia's tech sector was the worst performer, down 0.9 per cent and tracking with an overnight slump in Wall Street's tech-heavy Nasdaq, dragging on names like WiseTech, Life360 and Megaport.
Consumer staples rebounded 0.4 per cent after selling off on Monday, as Coles rose 0.8 per cent and Treasury Wine Estates bounced 1.1 per cent higher after a write-down notification prompted a sell-off the session before.
Consumer cyclicals faded 0.3 per cent lower, as segment giants Wesfarmers and JB Hi-Fi edged into the red.
KFC owner-operator Collins Foods fell more than two per cent despite upgrading its profit outlook and lifting its global revenue 6.6 per cent to $750 million in the six months to October.
Crypto currency Bitcoin had tumbled below $US84,000 for the second time since April, with crypto markets under continued pressure, Zerocap Analyst Emir Ibrahim said.Â
"Traders continue to point to weak Bitcoin exchange-traded funds inflows and limited dip-buying as signs that structural demand remains muted," Mr Ibrahim said.
ANZ has scrapped its expectations of a local interest rate cut in the first half of 2026, due to recent inflation pressures and what it views as a balanced labour market.
The bank's head of Australian economics Adam Boyton doesn't believe a recent price growth spike is permanent.
"As a result, we expect the RBA to be on an extended hold, with the cash rate to remain at its current level of 3.6 per cent," Mr Boyton wrote in a research note.
The Australian Bureau of Statistics will release national economic growth numbers for the quarter to September on Wednesday.
The Australian dollar is buying 65.42 US cents, roughly on par with 65.41 US cents on Monday at 5pm.
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