The benchmark S&P/ASX200 index rose 25.1 points by midday on Monday, up 0.29 per cent to 8707.2, as the broader All Ordinaries gained 25.9 points, or 0.26 per cent, to 8877.9.
After a volatile week partly driven by Australia's fourth interest rate hike in 2026, and a near-$60 billion stock market sell-off on Thursday, the next trading days were looking lighter in terms of data and event risk, Capital.com senior market analyst Kyle Rodda said.
"The major focus will likely remain on geopolitical risk in the Middle East, with crude (oil) prices remaining choppy," he said.
"Reports that the US is building up military assets in the region as strikes on tankers increase and the flow of crude out of the Gulf dips are keeping oil prices supported."
The Brent crude benchmark had eased slightly since Friday, after OPEC+ nations agreed to keep their November output targets steady, and as G7 countries flagged plans to release 100 million barrels of diesel and fuel reserves over the next four months.
Local coal producers were some of the best energy sector performers on Monday, while Santos shares jumped 1.1 per cent to $8.64 and Woodside inched 0.2 per cent higher.
Basic materials stocks gained 0.6 per cent, led by BHP, Rio Tinto and South32 after copper prices rebounded from their nearly two-week retreat from record highs.
Gold producers were mixed as the precious metal continued to linger near $US4,153 ($A5,974) an ounce, taking the local sub-index 0.2 per cent lower.
Consumer discretionary was the weakest segment, down 0.7 per cent and tracking with Wesfarmers, Aristocrat and The Lottery Corporation.
Consumer staples, utilities, real estate trusts and IT stocks also lost ground.
In company news, biotechnology giant CSL has inked a deal with Alentis Therapeutics to co-develop and promote a new treatment for rare kidney and liver disease.
Australian artificial intelligence infrastructure player Firmus is weighing a potential a dual listing on the Nasdaq, the Australian Financial Review has reported ahead of the group's expected October 23 domestic float, with a $43.7 billion valuation target.
Fisher and Paykel Healthcare's shares improved after flagging plans to sell a portion of its Drury site to Health New Zealand.
As the US war on Iran drags on, global and Australian share markets could face further downside, with added risks coming from interest rates, inflation, stretched valuations and AI uncertainty, AMP chief economist Shane Oliver said.
"However, returns should still be OK for the next 12 months as a whole thanks to continuing economic growth with recession likely to be avoided, albeit it's a rising risk in Australia, and strong global profit growth and likely rate cuts next year," Dr Oliver said.
The Australian dollar was buying 69.54 US cents, up from 69.37 on Friday at 5pm.
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