News: XGD Australia shares rise most in nearly 4 months on energy, mining stocks

• ASX 200 posts biggest one-day gain since March 1
• Energy stocks top gainers on ASX 200
• COVID-19 cases in NSW weigh on sentiment

(Updates to close)

Australian shares jumped the most since March on Tuesday, rebounding from the previous session's drop as an overnight rally on Wall Street spurred investors to pile into domestic energy and mining stocks.

The benchmark ASX 200 index (xjo) ended 1.5% higher at 7,342.2 points, recouping much of Monday's 1.8% drop.

"It is a bounce back ... predominantly the big factor being a swing in Wall Street that is dragging the buyers back in," said Henry Jennings, a senior analyst at Marcustoday Financial Newsletter.

U.S. stocks ended sharply higher overnight as investors loaded up on energy and other sectors expected to outperform as the economy recovers from the COVID-19 pandemic.

But the Australian market's gains were capped by concerns around COVID-19 cases in the country's most populous state of New South Wales (NSW), Jennings said.

NSW earlier in the day extended its mask mandate for a week in Sydney after reporting its biggest spike in locally acquired coronavirus cases in almost a week.

The domestic energy index .AXEJ surged 2.2% as oil prices also advanced. Engineering solutions firm Worley Ltd (WOR) rose 6.1%, while Santos Ltd (BPT) added 3.2%.

Benchmark heavyweight miners .AXMM gained 2.1%, with Rio Tinto (RIO) firming 1.6% and the world's largest miner, BHP Group (BHP) , advancing 2.4%.

Investment firm Washington H. Soul Pattinson and Co (SOL) added nearly 1% after saying it would buy smaller rival Milton Corp (MLT) for A$4.05 billion ($3.05 billion).

Milton's shares surged 16% to a record high. In New Zealand, the S&P/NZX 50 (nz50) rose 0.3% to 12,534.80 points, with retirement home operator Arvida Group Ltd (ARV) leading the gains on the bourse with a 4.1% rise.

A survey showed the country's consumer confidence rose in the second quarter with robust economic conditions expected to continue this year.

($1 = 1.3300 Australian dollars)