Australian shares rose on Tuesday, powered by gains in energy stocks after oil prices climbed overnight on hopes that the Omicron coronavirus variant would have a less damaging economic impact if its symptoms proved mostly mild.

The S&P/ASX 200 index was up 0.7% at 7,292.0 by 1136 GMT. The benchmark had closed 0.05% higher on Monday.

Investors were also awaiting the Reserve Bank of Australia's policy decision later in the day, where it is expected to hold the cash rate at a record low.

Grocery distributor Metcash, up over 3%, was one of the top gainers on the benchmark for the second straight session, after a solid half-year earnings report on Monday.

Among sub-indexes, energy stocks led gains with a 1% jump after oil prices rebounded nearly 5% overnight. Beach Energy Ltd was the top gainer, up 3.21%, followed by Oil Search Ltd, rising 2.39?%.

Oil Search was also boosted by an exchange filing saying that its proxy votes came heavily in favour of its A$8.8 billion ($6.21 billion) buyout bid by Santos.

Technology stocks rose 0.82% led by Tyro Payments Ltd, up 4.48%, followed by NEXTDC Ltd, gaining 2.63%.

Financial stocks rose 0.46% led by Zip Co Ltd , up 4.15%, followed by Bank of Queensland Ltd, gaining 2.83%.

Bank of Queensland said that its expenses for the year would be about 1% lower, as it focuses on cutting costs.

In New Zealand, the benchmark rose 0.6% to 12,671.47. The top gainer was SKY Network Television Ltd , up 13.14%, after it raised its full-year profit outlook and signalled cost cuts.