(Adds analysis, quotes, stocks on the move)
SYDNEY, April 15 (Reuters) - Australian shares gained 0.7 percent on Tuesday, rebounding from a slide in the previous session as Wall Street closed higher overnight, while the Reserve Bank of Australia said it plans to keep interest rates steady for some time.
The banking sector underpinned moves higher with Westpac Banking Corp added 0.6 percent and Commonwealth Bank of Australia edged 0.3 percent higher.
Banks have had a mixed run compared to stellar gains in 2013. Westpac and ANZ have outperformed, up 6.4 percent and 4.1 percent respectively this year. NAB is roughly in line with the broader market, both up 0.9 percent while Commonwealth Bank has lost 1.2 percent in 2014.
Australia's central bank said in the minutes of its last policy meeting that economic developments in the past month had done nothing to sway its resolve to keep interest rates steady for a while, noting there had been further signs that low borrowing costs were supporting growth.
The S&P/ASX 200 index climbed 37.6 points to 5,396.5 by 0144 GMT with gains across the board. The benchmark slid 1.3 precent on Monday, its biggest decline in a month.
"On a day-to-day basis volatility is starting to pick up a bit, it's as much a rebalancing of valuation," said Martin Lakos, division director at Macquarie Bank, adding that local stocks have been caught up in U.S. market momentum in recent sessions.
"It's still also a little bit of risk aversion in regards to what's happening in Ukraine but the key for us still is all about earnings and earnings growth and we're pretty positive about the outlook."
Nickel hit its highest in nearly 14 months on Indonesia's export ore ban, now in its third month, and the prospect of tougher sanctions on Russia over its actions towards Ukraine.
Among resource stocks, BHP Billiton Ltd gained 0.9 percent while OZ Minerals Ltd jumped 3 percent. OZ minerals posted solid first quarter copper production at 18,000 tonnes.
Rio Tinto Ltd (Xetra: 855018 - news) added 0.3 percent as the world no.2 iron ore miner posted an 8 percent drop in its first quarter shipments compared with the previous quarter, but said production was still up 16 percent on the first quarter a year ago as it ramps up production at its Australian mines.
The only sector on the backfoot was gold miners as investors piled back into riskier assets. Newcrest Mining Ltd lost 2 percent and Regis Resources Ltd tumbled 3.5 percent.
Kimberley Diamonds Ltd slumped 8.6 percent to 6-week lows of A$1.06 after the company said it had deferred its capital raising, with the recommissioning of its mine in Botswana and the commencement of mining operations at Smoke Creek posponed until funding is available.
Nufarm Ltd climbed 1.8 percent as the agriculture chemical company said it will close its manufacturing facility in New Zealand with expected annualised savings of A$3 million.
New Zealand's benchmark NZX 50 index added 0.1 percent to 5,068.2.
(Reporting by Thuy Ong; Editing by Eric Meijer)