The benchmark S&P/ASX200 index on Monday closed up 45 points, or 0.62 per cent, to 7,328.6, while the broader All Ordinaries was up 41.7 points, or 0.56 per cent, to 7,525.7.
"It's the third trading day of improvements, but of course we've had four weeks of losses in a row, so that doesn't mean too much," CommSec market analyst Steven Daghlian told AAP.
"But at least we're improving."
It is a "pretty big week ahead", Mr Daghlian added, with the Reserve Bank of Australia decision on Tuesday "without a doubt the highlight".
What the RBA decides on rates is not expected to move the market much, as basically everyone regards it as a foregone conclusion that the RBA will hike rates another 25 basis points, taking the cash rate to 3.6 per cent, Mr Daghlian said.
"What might be more interesting is what they (the RBA) guide for in the coming months - so even the smallest changes to that wording, especially in the final paragraph of that statement, will be quite interesting," he said.
"Especially because for the last two or three weeks, we've had economic data that's been a little softer than some had anticipated."
RBA Governor Phil Lowe is also scheduled to speak at the Australian Financial Review's Business Summit in Sydney before the market opens on Wednesday.
Eight of the ASX's sectors finished up and three - energy, materials and utilities - closed lower.
China's lower-than-expected economic growth target of five per cent announced over the weekend may have weighed on commodity prices, although both sectors also had a strong performance last week.
In mining, BHP turned around its midday losses to edge 0.1 per cent higher at $48.39, while Fortescue Metals dropped 2.5 per cent to $22.20 and Rio Tinto fell 0.8 per cent to $125.37.
In the energy sector, Woodside declined 1.5 per cent to $37.21, Santos retreated 0.8 per cent to $7.14 and Whitehaven Coal subtracted 2.1 per cent to $7.33.
But the big banks turned in a solid performance, with Westpac up 1.7 per cent to $22.09, ANZ up 1.5 per cent to $24.20, CBA climbing 0.9 per cent to $98.60 and NAB rising 1.1 per cent to $29.48.
Consumer discretionary shares were the biggest gainers, collectively rising two per cent.
Target owner Wesfarmers rose 2.4 per cent to $49.21, Eagers Automotive added 2.6 per cent to $14.38 and Rebel owner Super Retail Group climbed 3.1 per cent to $13.11.
In tech, Xero rose 3.8 per cent to $78.47, Life360 soared 10.6 per cent to $5.39 on news the family-tracking company would be rejoining the ASX200, and Brainchip advanced 16.7 per cent to 59.5c after introducing its second-generation artificial intelligence chip platform.
All the big banks had a good day, with NAB up 2.1 per cent to $29.85, Westpac adding 1.6 per cent to $22.07, ANZ ahead 1.9 per cent to $24.31 and CBA up 1.1 per cent to $98.86.
Bank of Queensland was up 1.6 per cent to $6.92 after a note from Citi mulled the possibility of a merger between it and Bendigo & Adelaide Bank. BEN was down 1.6 per cent to $9.45 as the regional lender traded ex-dividend.
Back in the mining sector, Core Lithium had gained 6.3 per cent to reach a two-week high of $1.02 after doubling its estimates of its Fennis lithium deposit on the outskirts of Darwin in the Northern Territory.
In small caps, Rhythm Biosciences sunk 38 per cent to a two-a-and-half year low of 59.5c after announcing it would withdraw its application asking the Australian Therapeutic Goods Administration to approve its blood test for colorectal cancer. It plans to resubmit the 1,300-page application later this year to better meet the TGA's feedback and answer questions posed.
Bravura Solutions was in a trading halt as the struggling financial software company announced it would raise $80 million by selling shares at a deep discount.
The Australian dollar was buying 67.56 US cents, from 67.46 US cents at Friday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Monday up 45 points, or 0.62 per cent, at 7,328.6
* The broader All Ordinaries added 41.7 points, or 0.56 per cent, to 7,525.7
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 67.56 US cents, from 67.46 US cents at Friday's ASX close
* 91.70 Japanese yen, from 92.18 Japanese yen
* 63.45 Euro cents, from 63.56 Euro cents
* 56.13 British pence, from 56.37 pence
* 108.74 NZ cents, from 108.36 NZ cents.
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