For the second day in a row, the local share market has shaken off a dreary start to close modestly higher.
The benchmark S&P/ASX200 index was down as much as 0.65 per cent in the first half-hour of trading, but rose steadily after that to finish Monday on the highs of the day, up 7.7 points, or 0.11 per cent, at 7,076.5.
The broader All Ordinaries gained 8.6 points, or 0.12 per cent, to 7,278.6.
"We staged quite a recovery all afternoon - very similar to what actually happened on Friday, when our market hit its worst levels early and then managed to bounce back, perhaps with bargain hunters jumping in to take advantage," CommSec market analyst Steven Daghlian said.
Nine of the ASX's 11 sectors finished higher and just two lost ground - but they were the two heavyweights, mining and financials, which fell 0.7 and 0.2 per cent, respectively.
BHP dropped 0.4 per cent to $44.15, Fortescue Metals fell 1.3 per cent to $20.54 and Rio Tinto was 1.2 per cent lower at $113.18.
The Big Four banks were all lower as well, with concerns a proposal by the Australian Prudential Regulation Authority to raise capital requirements for banks could jeopardise share buybacks.
CBA and ANZ both fell 0.2 per cent, to $99.88 and $24.98, respectively. NAB and Westpac both dipped 0.1 per cent, to $28.86 and $21.12, respectively.
Qantas fell 1.5 per cent to a one-year low of $5.23 after the airline said it would spend another $80 million to address customer "pain points", including contact centre resourcing and in-flight catering.
It also warned of a $200 million blow out on jet fuel because of rising prices and a lower Australian dollar. But travel demand remained strong, Qantas said.
InvoCare gained 0.3 per cent to $12.58 after an independent expert concluded TPG Capital's $12.70-per-share, $1.8 billion offer for the funeral home operator was fair and reasonable.
Shareholders are expected to vote on the proposal on October 31.
In the energy sector, uranium developers were having another strong day amid bullish price forecasts for the nuclear fuel.
Boss Energy rose 5.1 per cent to an all-time high of $4.73, while Deep Yellow added 13.2 per cent to a one-year high of $1.205 and Bannerman Energy 11.7 per cent to a year-and-a-half high of $2.76.
Santos rose 0.7 per cent to $7.69 as the oil and gas company's board of directors said it was granting managing director and CEO Kevin Gallagher flexible working arrangements for the rest of the year to support a family member's medical treatments.
The Australian dollar was buying 64.22 US cents, from 64.33 US cents at Friday's ASX close.
Looking forward, Tim Waterer, chief market analyst with KCM Trade, said while it was a new week, the same concerns remained - how a prolonged period of high interest rates would hamper growth.
The outlook for risk assets depended on whether US 10-year bond yields pushed to 4.5 per cent, a level they hit last week on the outlook for higher rates, Mr Waterer said. Those yields were at 4.46 per cent on Monday.
Traders will also closely watch August consumer price figures the Australian Bureau of Statistics will release on Wednesday.
Corpay APAC's Peter Dragicevich said there was a risk the readout would show inflation re-accelerating, given a recent sharp rise in petrol prices, the weaker Australian dollar and stickiness across services inflation.
That would raise the chances of another rate hike, pressuring equities.
ON THE ASX:
* The S&P/ASX200 index finished Monday up 7.7 points at 7,076.5, a gain of 0.11 per cent.
* The All Ordinaries added 8.6 points, or 0.12 per cent, to 7,278.6.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.22 US cents, from 64.33 US cents at Friday's ASX close
* 95.30 Japanese yen, from 95.39 Japanese yen
* 60.36 Euro cents, from 60.31 Euro cents
* 52.47 British pence, from 52.08 British pence
* 107.93 NZ cents, from 108.45 NZ cents
