Markets Live: ASX retakes 5,800

The gains came as investors reacted to a lessening of trade tensions between the US and China, after officials from both countries signalled a preference to solve the US trade deficit with China through talks rather than tariffs.

Global growth-sensitive miners were stronger on Tuesday, with BHP shares up 1.1 per cent, Rio Tinto jumping 1.1 per cent and South32 climbing 1.6 per cent.

Whitehaven Coal rose 4.9 per cent after an upgrade at Morgan Stanley.

Of the banks, the big four were in a tight range, trading between 0.4 per cent to 0.6 per cent higher in early action.

Other notable advancers included A2 Milk, up 3.3 per cent, and CSL, trading higher by 1.3 per cent.

On the downside, gold miners were giving back some of the previous session's gains, with Newcrest down 1.1 per cent and Northern Star down 1.6 per cent.

After days of dropping hints that pensioners would be looked after, Labor moved to spare the most vulnerable retirees from the policy that was always meant to be aimed at those who were better off.

Despite anecdotal evidence of a strong backlash, Labor won easily the Batman byelection held just days after the policy was announced. Also, the latest Newspoll, published Monday, showed the policy had not harmed Labor's vote.

It still led the government by 53 per cent to 47 per cent on a two-party preferred basis and its primary vote had inched up a point to 39 per cent.

Phillip Coorey reports

"Investors had been discounting towards the worst case scenario and I think the probability of such an event is quite low," Mr LaVorgna said.

"A lot of this is messaging and symbolism and trying to affect change. It will be messy at times."

The White House's protectionist trade adviser Peter Navarro said Mr Mnuchin and US Trade Representative Robert Lighthizer were talking to Chinese counterparts to end the theft of US intellectual property and forced technology transfers.

"We will continue to do that and we are hopeful that China will work with us to address some of these practices," Mr Navarro said on CNBC.

John Kehoe reports

The opening gap for the S&P 500 to open the week amounted to 1.2 per cent – the largest bullish jump on the first trade since November 2008. Indeed, SPI futures are pointing convincingly higher before Tuesday's opening bell.

Gold prices enjoyed a lift at the expense of the weaker US dollar, leveraging its appeal as an anti-fiat alternative. Crude oil prices retreated however, rebuffing geopolitical risks that helped push them to a two-month high last week.That seems to reflect easing worries about a trade war between the US and China after Treasury Secretary Mnuchin expressed optimism in reaching a deal without resorting to tit-for-tat protectionism.

The recovery in risk appetite has helped engineer a tepid AUD/USD bounce, though prices remain firmly within the bounds of the digestion range carved out after the currency pair slid to a three-month low last week.

Perhaps the most remarkable feature of the week ahead of us is the curb on liquidity that would seem to follow the holiday conditions scheduled for the Western world. Good Friday is a market holiday for many of the most liquid financial centres around the world, and this anticipated curb on turnover will dampen all but the most dedicated efforts to swing the underlying sentiment theme one way or the other.

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The Dow leapt 669 points or 2.8 per cent. Twenty-nine of the Dow's 30 components were higher, paced by a 7.6 per cent leap in Microsoft, 6.3 per cent rise in Intel and 4.8 per cent advance for Apple. GE, down 1.4 per cent, was the lone loser.

Chipmakers and banks led gains on the S&P 500 Index, which had its biggest one-day gain since August 2005, according to Bloomberg, as 20 stocks climbed for every one that fell.

The advance reversed Friday's drop, though the gauge still had a way to go to make up all of last week's losses. Even Facebook, which fell more than 6.5 per cent at one point, ended higher, up 0.4 per cent.

The optimism toward US stocks emerged after the limits of the Trump administration's willingness to embrace protectionism came into view over the weekend.

Treasury Secretary Steven Mnuchin told Fox News that he's "cautiously hopeful" that China will reach a deal to avoid tariffs on $US50 billion of US exports, while European leaders demanded a permanent exclusion at the threat of retaliation and a deal was struck with South Korea.

On the economic agenda today:

• RBA assistant governor Kent speech
• Euro zone money supply February
• Economic confidence March
• Business climate March
• Consumer confidence March
• US S&P CoreLogic house prices January
• Richmond Fed manufacturing March,
• CB consumer confidence March

Stocks to watch:

• Bendigo & Adelaide upgraded to buy at Morningstar
• IOOF Holdings upgraded to buy at UBS
• Kibaran rated new buy at Baillieu Holst
• Sigma Healthcare upgraded to buy at Morningstar
• Western Areas upgraded to hold at Canaccord
• Whitehaven upgraded to overweight at Morgan Stanley
• Ex-Dividend: Iluka, Japara, Link Administration, Northern Star, Webjet