Australia shares rose on Monday, taking their cue from higher US stock futures with the health care sector and consumer staples helping to soothe nervousness over an escalating US-China trade spat. The major US indices dropped between 2.2 percent and 2.3 percent on Friday after US President Donald Trump threatened to slap $100 billion more in tariffs on Chinese imports.
However, E-Mini futures for the S&P 500 on Monday were up 0.7 percent, while NASDAQ futures rose 0.9 percent.
"I think local investors were a bit surprised at the depth of the sell-off from Friday night in the US," said Michael McCarthy, chief market strategist at CMC Markets. The S&P/ASX 200 index gained 0.4 percent, or 20 points, to 5,808.7, its third gain in four sessions. It was little changed on Friday.
Biotherapeutics firm CSL Ltd was the main index's biggest contributor, rising 1 percent. On Monday, Swiss drugmaker Novartis AG agreed to buy US gene therapy company AveXis Inc for $8.7 billion in cash.
Australian health care stocks gained, with Sonic Healthcare Ltd and Australia listed shares of Fisher & Paykel Healthcare Corp Ltd rising 1.3 percent and 2.1 percent, respectively. Mining major BHP ended marginally higher while rival Rio Tinto recovered from early losses to close 0.3 percent higher.
Among financials, Commonwealth Bank of Australia tacked on about 0.1 percent while fellow lender Westpac Banking Corp gained 0.2 percent. The sector index was marginally higher.
On Monday, mining infrastructure group Mineral Resources Ltd said it agreed to buy iron ore miner Atlas Iron Ltd via a scheme of arrangement, valuing Atlas at $215.2 million. Atlas Iron's shares closed 42.1 percent higher while those of Mineral Resources lost 6.9 percent.
"There is also a bid on the table for Santos, Beach Petroleum also under bid, so this is something we are certainly looking out for in current markets...it does show potential for improved valuation," said CMC Markets' McCarthy.
McCarthy said that Atlas' small market cap meant the deal was not a significant play overall but added to the resource sector theme of smaller companies being vulnerable to takeovers. On the other hand, energy stocks were Monday's only losers with the sector index slipping 0.4 percent, despite a recovery in oil prices.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index rose 0.7 percent, or 60.86 points, to 8,454.13, helped by gains in materials and health care stocks. Fletcher Building Ltd ended 2.7 percent higher while Fisher & Paykel Healthcare Corporation Ltd gained 2.8 percent.