Australian shares rose on Monday as comments from two US central bank officials eased fears about a bigger interest rate hike this month, while Suncorp jumped after ANZ said it would buy the insurer's banking business.

The ASX 200 closed up 82 points, or 1.2 per cent, at 6,687.

By 04:15pm AEST, the Australian dollar was flat at 67.96 US cents.

Market participants felt relieved after remarks from two US Federal Reserve officials indicated a 75-basis-point rate hike at the central bank's July 26-27 meeting, rather than a full-point increase.

In Australia, energy stocks led the gains for the day, climbing as much as 2.2 per cent after Brent oil prices jumped on Friday.

Miners (+2.5 per cent) advanced, even after iron ore prices in China slumped 10 per cent on Friday over a weak demand outlook in Asia's largest economy.

Index majors Rio Tinto, Fortescue Metals Group and BHP Group climbed between 2.1 per cent and 3.4 per cent.

Financials climbed about 1.4 per cent, with three of the "big four" banks rising between 1 per cent and 1.9 per cent.

Technology stocks added 2.9 per cent, with Block's shares gaining about 6 per cent.

The healthcare sector was the laggard, dropping 0.5 per cent.

In corporate news, Suncorp jumped 6.1 per cent, to $11.78, on the news that ANZ would buy the company's banking business for $4.9 billion to bolster its customer growth and home-loan book.

Shares of ANZ were halted from trading.

Meanwhile, New Zealand government data shows the country's annual inflation rose to 7.3 per cent from 6.9 per cent in the first quarter, which exceeded the expectations of many economists.

World stocks rally

Global equities climbed on Friday, while the dollar dipped and oil rose as investors reduced their expectations of an aggressive interest rate hike by the Federal Reserve this month and as US spending data beat forecasts.

Investors still face concerns that the world economy is headed for recession as central banks rush to get on top of galloping inflation, with steep interest rate rises seen this week in Canada, New Zealand, Chile, South Korea and the Philippines. Many are also still digesting an easing of Italy's political crisis.

Fears of an economic downturn were fanned on Friday by Chinese data showing annualised 0.4 per cent growth in the second quarter, the worst since at least 1992, excluding early 2020 when the COVID-19 pandemic erupted.

The data reflect the colossal hit from widespread COVID-19 lockdowns. It sent Chinese shares 1.7 per cent lower and dragged an Asian ex-Japan index to two-year lows.

Investors elsewhere looked on the bright side.

"The market is due for a short-term snapback and, because we got better-than-expected results from Citigroup and retail sales, that gave fundamental reasons for investors to be optimistic," Sam Stovall, chief investment strategist at CFRA, said.

The pan-European STOXX 600 index rose 1.8 per cent and MSCI's gauge of stocks across the globe gained 1.5 per cent.

Wall Street's main indexes traded higher as upbeat retail sales data allayed concerns about an economic slowdown, while shares of Citigroup surged after quarterly results were released.

Traders may be pressured overall, however, by companies' second-quarter earnings, which so far have mostly underwhelmed.

The Dow Jones Industrial Average rose 1.9 per cent, while the S&P 500 gained 1.6 per cent, and the Nasdaq Composite added 1.4 per cent.

On the oil markets, Brent crude was down, trading at $US100.41 a barrel, by 10:21am AEST.

ABC/Reuters