Mining giants thrived despite continued falling iron ore prices, and Commonwealth Bank shares set a record price, in a wide-ranging rally on the ASX.
BHP, Fortescue and Rio Tinto rose by more than one per cent and materials shares climbed almost one per cent after the category had four consecutive sessions of losses.
The gains came despite the price of iron ore, used to make steel, slipping to about $US187 per tonne.
Chinese government officials last week declared a crackdown on rising commodity prices. Iron ore has traded as high as $US240 per tonne.
Commonwealth Bank shares set a record price of $99.65.
Shares closed up by 0.88 per cent to $99.63.
Financial shares closed more than one per cent higher.
There were also gains of more than one per cent for shares in health, consumer discretionaries, telecommunications and property.
The benchmark S&P/ASX200 index closed up by 69.3 points, or 0.98 per cent, to 7115.2.
The All Ordinaries closed up by 73.1 points, or one per cent, to 7349.1.
The rally followed stocks on Wall Street closing higher.
GSFM investment strategy consultant Stephen Miller said shares had stabilised recently after a scare from higher than expected US inflation data earlier this month.
He said investors' concerns that central banks might ease or withdraw financial stimulus had subsided.
A US Federal Reserve official helped allay fears when he said the central bank should not look at changing policy in the midst of the coronavirus pandemic.
While the ASX has had four consecutive sessions of gains, CommSec market analyst Steven Daghlian was not so upbeat.
He noted the market had done little more than recoup its losses from Wednesday's 1.9 per cent loss.
"The market has not found a fresh sense of optimism," he said.
US consumer spending data for April, due later this week, could be the next test for inflation concerns.
Central banks have said inflation will be temporary as economies recover from the pandemic, but Mr Miller was unsure.
"I actually think inflation may be a little more persistent," he said.
Meanwhile, a COVID-19 cluster in Melbourne's north rose to nine infections.
The latest four people infected are all family members of the fifth person in the cluster.
Shops, cafes, restaurants and pubs continue trading with limits on the number of customers on-site.
New Zealand suspended quarantine-free travel from Victoria.
There was no obvious effect on travel stocks. Qantas was lower by 0.21 per cent to $4.71.
Investors in Pepper Money may be worried after the company joined the ASX and closed lower by 9.69 per cent to $2.61.
Shares opened at $2.61 and fluctuated between a low of $2.41 and a high of $2.73.
Brisbane-based software provider TechnologyOne warned full-year earnings may not be as pleasing as its 48 per cent rise in first-half earnings.
The vendor is still encouraging customers to move from on-site installations to online delivery of its products, which will help long-term growth.
Boss Ed Chung said sales under the old model would drop by about $7 million this financial year and have an impact on full-year earnings.
Shares rose 2.11 per cent to $9.18.
Cancer treatment provider Imugene shot up 12.35 per cent to 45 cents after its chairman and chief executive bought more shares.
Executive chairman Paul Hopper bought 25 million shares for $1.07 million.
Chief executive Leslie Chong bought 36.2 million shares for $1.51 million.
The Australian dollar was buying 77.71 US cents at 1720 AEST, higher from 77.40 US cents at Monday's close.
ON THE ASX
* The benchmark S&P/ASX200 index closed up by 69.3 points, or 0.98 per cent, to 7115.2 on Tuesday.
* The All Ordinaries closed higher by 73.1 points, or one per cent, to 7349.1.
* At 1720 AEST, the SPI200 futures index was down 6 points, or 0.08 per cent, to 7110.
One Australian dollar buys:
* 77.71 US cents, from 77.40 cents on Monday
* 84.41 Japanese yen, from 84.11 yen
* 63.40 Euro cents, from 63.46 cents
* 54.73 British pence, from 54.64 pence
* 107.46 NZ cents, from 107.75 cents.