SYDNEY: Australian shares rose 1.2 percent to one-week highs on Tuesday, underpinned by a recovery in resource company shares after losses on Monday on concerns about a moderation in Chinese demand.
Dealers said while the market had bounced back sharply, it was unlikely to break out of the 4,200 to 4,300 range until Europe stabilises.
"We saw markets storm back from an early slump in US trade and it seems the momentum has continued into the Asian session," said Stan Shamu, a strategist at IG Markets.
Traders said the focus will be on the tone of the US Fed and US retail sales data.
The benchmark S&P/ASX 200 index was up 50.91 points at 4,247.60, more than recouping Monday's 15-point loss.
A weakening Aussie dollar stoked gains in companies with large offshore sales, including QBE Insurance Group,up 5.3 percent, blood products maker CSL, up 2 percent, and pallet provider Brambles, up 1.9 percent.
Flinders Mines ended flat. Its Pilbara iron ore project cleared a key hurdle, securing a mining agreement with Aboriginal owners of the land to allow it to gain a mining lease.
Graincorp rose 2.25 percent, adding to a 4.2 percent jump on Monday after Canadian rival Viterra said it had received expressions of interest in taking it over. Glencore is one of a handful of parties interested, a Swiss-based industry source said on Monday.
New Zealand's benchmark NZX 50 index was up 0.5 percent.
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