Miners and banks have helped the ASX200 to a modest gain after investors overcame an early stumble, thanks to Chinese trade data which showed high demand continuing for iron ore.
The S&P/ASX200 benchmark index closed higher by 19.3 points, or 0.33 per cent, at 5944.8 points on Monday.
The first session after the Victorian government's decision to continue stage four virus restrictions in Melbourne for two weeks led to a session low of 5869.9 in the first 20 minutes before a recovery.
The All Ordinaries index closed up by 21.1 points, or 0.35 per cent, to 6129.9.
Investors overcame their early lack of confidence after the publication of Chinese import and export figures.
China's exports rose for the third consecutive month in August, eclipsing an extended fall in imports, as more trading partners relaxed coronavirus lockdowns.
Iron ore imports fell 10.9 per cent from July, but rose from a year earlier on resilient demand for steel.
In the first eight months of the year, China imported 759.91 million tonnes of iron ore, rising 11 per cent from the January-August period in 2019.
Investsmart chief head of strategy Evan Lucas noted investor activity on the ASX changed after the China data.
"The modelling today showed iron ore prices will remain strong for the near future," he said.
"China's drive to get through its COVID issues is very much benefiting us as well."
The ASX200 reached a session high of 5958.9.
The materials sector, which includes the miners, was the top performer and rose 1.64 per cent.
BHP rose by 2.4 per cent to $37.06, Rio Tinto climbed by 2.47 per cent to $97.94 and Fortescue was up by 2.05 per cent to 17.88.
Financials gained 0.93 per cent, while industrials was the bigger loser, down 1.67 per cent.
Mr Lucas did not give much weight to CSL's announcement that it had deals to supply the Australian government with coronavirus vaccine candidates from the University of Oxford/AstraZeneca and the University of Queensland.
The biotech and government had previously said they were working together.
"There isn't really anything new there," Mr Lucas said of the information.
CSL finished up by 1.1 per cent to $282.13.
Activity in Australia's services sector sank further in August, when Victoria imposed a second round of coronavirus restrictions.
The Australian Industry Group's performance of services index fell 1.5 points to 42.5 in August, remaining below the 50-mark which separates contraction in the industry from expansion.
In banking, ANZ was higher by 1.8 per cent to $18.13, the Commonwealth rose by 0.96 per cent to $67.37, NAB gained 1.5 per cent to $17.61 and Westpac climbed 1.88 per cent to $17.38.
New Zealand buy now pay later provider Laybuy had a solid debut on the ASX after listing.
Laybuy joined the Australian stock exchange at 1200 AEST on Monday, offering shares at $1.41, after an initial public offering that raised $80 million from investors.
The share price finished higher by 45.39 per cent to $2.05.
There will be no trade on Wall Street on Monday in the US due to the Labor Day public holiday.
Items of interest for investors on Tuesday will include weekly payroll data and building approvals data for July.
The Aussie dollar was buying 72.75 US cents at 1718 AEST, higher from 72.68 US cents at the close on Friday.
ON THE ASX
* The S&P/ASX200 benchmark index closed higher by 19.3 points, or 0.33 per cent, at 5944.8 points on Monday.
* The All Ordinaries index closed up by 21.1 points, or 0.35 per cent, to 6129.9.
* At 1718 AEST, the SPI200 futures index was trading lower by 7.0 points, or 0.12 per cent, at 5,917 points.
One Australian dollar buys:
* 72.75 US cents, from 72.73 US cents on Friday
* 77.29 Japanese yen, from 77.17 yen
* 61.51 Euro cents, from 61.41 cents
* 55.08 British pence, from 54.79 pence
* 108.67 NZ cents, from 108.47 cents