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ASX returns from Easter in upbeat mood

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Strong energy and resources prices lifted Australia's commodity-tinged stock exchange in the first trading session after the Easter break.

The benchmark S&P/ASX200 index ended 41.8 points higher to close at 7565.2 on Tuesday, up 0.56 per cent from Thursday, amid broad strength in companies tied to minerals and oil and gas.

The index is clawing back towards its all-time high of 7632.8, struck in August last year.

Energy stocks, including Woodside (up 1.61 per cent) and Santos (1.59 per cent higher), caught the updraft, as did the largest gold producer on the stock exchange, Newcrest Mining (up 1.51 per cent).

The All Ordinaries index rose 45.7 points, or 0.58 per cent, to 7867.9.

The materials index rose by more than one per cent, led by the big miners BHP, Rio Tinto and Fortescue Metals.

Improved commodity prices paved the way for the materials and energy sectors, broker CommSec said in a market note, and goldmining shares rose after prices for the precious metal lifted overnight.

While investors supported the miners and energy companies in early trading, bank shares also rallied after the Reserve Bank of Australia released an upbeat outlook for the economy in its April 5 board meeting minutes, released on Tuesday.

The big four traded higher, as did Macquarie Group.

AMP shares rose 0.94 per cent to $107 on Tuesday after it confirmed it was in talks to sell assets and businesses of Collimate Capital, its wealth and asset management group formerly known as AMP Capital.

Shares in industrial group DGL shot up more than eight per cent after the company upgraded its full-year guidance. Wealth platform Praemium was also one of the day's star performers, with investors pushing shares up by 15.32 per cent after the company announced strong inflows.

The broad gains contrasted with modest falls in US share market indices on Monday. The US earnings season continues this week with major companies including Netflix, IBM and Lockheed Martin scheduled to report.

The start of the trading week has been marked by rising oil prices, driven by sanctions on Russia, and high bond yields in the US and Australia. The conflict has been pushing investors into the safe-haven asset of gold, while the disruption to the oil trade has kept fuel prices high.

Government-issued bonds have been trading at elevated levels amid growing inflationary pressures that are expected to prompt the RBA to start lifting the cash rate, currently at a record-low 0.1 per cent.

The RBA will observe rising inflation levels and wages growth closely in the coming months, according to the board meeting minutes.

"These developments have brought forward the likely timing of the first increase in interest rates," it said.

Higher cash rates - and bond yields - tend to weigh on share prices over time, as the cost of capital increases and investors switch out of more volatile stocks into the relative safety of government securities.

Forex traders have been supporting the greenback amid surging 10-year US Treasury note yields. This has been pressuring the Australian dollar, though it lifted modestly in the past 24 hours to trade at 73.79 US cents at 1700 AEST.

The Australian dollar is still lower than the 74.64 US cent level recorded when the share market closed on Thursday ahead of the Easter break.

ON THE ASX

* The benchmark S&P/ASX200 index ended 41.8 points, or 0.56 per cent, higher to 7565.2 on Tuesday.

* The All Ordinaries index rose 45.7 points, or 0.58 per cent, to 7867.9.

* At 1700 AEST, the SPI200 futures index was unchanged at 7534 points.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 73.79 US cents, from 74.64 cents when the share market closed on Thursday.

* 94.6 Japanese yen, from 93.43 yen

* 68.44 Euro cents, from 68.31 cents

* 56.73 British pence, from 57.75 pence

* 109.55 NZ cents, from 109.28 NZ cents.

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