The S&P/ASX200 rose 149.3 points on Tuesday, up 1.74 per cent, to 8,728.8, as the broader All Ordinaries gained 146.3 points, or 1.67 per cent, to 8,921.2.
The leading indices notched their highest closes in four weeks, but there could be more volatility ahead with the US vowing to expand attacks on Iranian energy infrastructure if the Strait of Hormuz - a choke point for a fifth of global oil supplies - isn't re-opened by Wednesday 10am AEST.
With the deadline for an escalation of US attacks already pushed back several times, investors were looking for real developments in the conflict over hypotheticals, IG market analyst Tony Sycamore said.
"The questions which remained unanswered last week are going to remain largely unanswered to a degree this week, it's just whether (US President Donald) Trump decides to escalate," Mr Sycamore told AAP.
"We're all hoping for the best, but by the same token, the repricing of markets is preparing for the worst and there could be a lot more to go in that in that area if it does go down the drain rapidly tomorrow morning."
The heavily-weighted basic materials and financials sectors buoyed the bourse, with both segments up more than 2.1 per cent.
Gold producers were broadly higher, as the precious metal hovered near $US4,641 ($A6,707) an ounce.
Mega miners BHP and Rio Tinto each gained around three per cent as iron ore futures edged above $US107.70 a tonne, their highest value since mid-January.
Three of the big four banks notched gains of 2.4 per cent or more, while ANZ lagged with a 1.7 per cent lift to $37.26 and as Macquarie shot 3.2 per cent higher.
The energy segment also gained ground, up 1.4 per cent as oil prices edged higher during the session.Â
Woodside was the biggest beneficiary, up 2.5 per cent to $35.80 in a quiet session for coal producers and uranium stocks.
ASX-listed IT stocks trailed a strong lead from US tech stocks overnight, the segment soaring almost four per cent higher, helped by a nearly 12 per cent rally in data centre group NextDC on the back of a $1 billion hybrid securities offer backed by La Caisse.
The traditionally defensive consumer staples sector was the weakest performer, eking a less-than 0.1 per cent improvement as A2 Milk tumbled after reaching an in principle agreement to settle a shareholder class action relating to guidance disclosure claims.
Consumer cyclicals had a better day, jumping 1.4 per cent with some strong large cap performances, and a 18 per cent charge from Mexican-inspired fast food chain Guzman Y Gomez on the back of a strong sales update.
The Australian dollar is buying 69.19 US cents, up from 68.68 US cents on Thursday at 5pm before the Easter break.
All eyes remained on Middle East, with investors keenly awaiting Wednesday's deadline and whether it would bring conflict escalation or a pathway to peace, eToro market analyst Josh Gilbert said.
"This face-off is the single biggest variable across every asset class, from oil to equities, meaning investors should be bracing for a volatile few days ahead," Mr Gilbert said.
"There's real uncertainty around how long this conflict will continue, which is naturally rattling even the most seasoned investors."
ON THE ASX:
* The S&P/ASX200 gained 149.3 points, or 1.74 per cent, to 8,728.8.
* The broader All Ordinaries rose 146.3 points, or 1.67 per cent, to 8,921.2.
One Australian dollar trades for:
* 69.19 US cents, from 68.68 US cents at 5pm AEDT on Thursday.
* 110.56 Japanese yen, from 109.46 Japanese yen.
* 59.93 euro cents, from 59.58 euro cents.
* 52.24 British pence, from 51.97 British pence.
* 121.26 NZ cents, from 120.20 NZ cents.
