The S&P/ASX200 inched 14.7 points higher on Monday, up 0.17 per cent, to 8,679.7, as the broader All Ordinaries gained 5.1 points, or 0.06 per cent, to 8,850.7.
The financials sector did some heavy lifting as dip-buyers fuelled a rebound in bank stocks, helped by a 2.3 per cent push from Macquarie to $244.98 after RBC Capital targeted a $300 share price for the investment giant.
Defensive sectors, such as utilities, consumer staples and healthcare stocks outperformed as the market braced for a likely Reserve Bank cash rate hike on Tuesday.
"The RBA is expected to hike to 4.6 per cent tomorrow, leaving the focus on whether we see any dovish dissents and the framing of the path forward," NAB economist Taylor Nugent said.
"August consumer price index follows Wednesday, where we expect headline to bounce higher to 4.1 per cent year-on-year on higher fuel prices."
Basic materials stocks were heavy as soaring bond yields weakened precious metals prices, while copper futures retreated as resurgent crude prices constrained global growth hopes after the US rejected an Iranian plan to reopen the Strait of Hormuz.
BHP shares fell 1.5 per cent to $59.80, while Rio Tinto lost 1.1 per cent to $163.04, and Fortescue eased 0.7 per cent to $16.26 as iron ore futures held roughly steady near $US97 a tonne.
Northern Star was a lonely success in the gold sub-index, soaring more than six per cent after confirming it had received and rejected a $38.7 billion takeover offer from Gold Fields.
The precious metal itself plunged 2.3 per cent during the session to $US4,172 ($A5,945) an ounce, its lowest level since early August, as silver dived more than four per cent to $US61.39 an ounce.
Healthcare stocks beat out the other 10 sectors, as CSL resumed its upswing to trade at $181.91, its highest price since February, while Cochlear and Telix were also strong.
In company news, New Zealand's Synlait Milk has had another difficult financial year, handing down a $NZ75.4 million ($A60.8 million) loss in the 12 months to July 31.
Karoon Energy shares tumbled almost 13 per cent after an electrical fault at its Bauna project in Brasil prompted the company to slash production guidance.
The Australian dollar is trading at 70.18 US cents, down slightly from 70.24 US cents on Friday at 5pm.
ON THE ASX:
* The S&P/ASX200 rose 14.7 points, or 0.17 per cent, to 8,679.7.
* The broader All Ordinaries gained 5.1 points, or 0.06 per cent, to 8,850.7.
One Australian dollar trades for:
* 70.18 US cents, from 70.24 US cents at 5pm AEST on Friday
* 110.52 Japanese yen, from 111.03 Japanese yen
* 61.68 euro cents, from 61.70 euro cents
* 52.99 British pence, from 53.11 pence
* 123.87 NZ cents, from 123.98 NZ cents
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