The S&P/ASX 200 index <.AXJO> rose 42.15 points to 5,557.20 by 0115 GMT. The benchmark lost 0.21 percent on Monday.

Banks and healthcare stocks led gains, aided by strong earnings from healthcare services provider Healthscope (>> Healthscope Ltd) which posted a nearly 19 percent rise in full year profits.

Australian companies have fared well in the current earnings season which is almost halfway through, Deutsche and UBS analysts wrote in separate 'earnings review' notes.

UBS expects companies to continue to do well in the current financial year helped by a revival in commodity prices and strength in the domestic economy.

Non-resources companies, on average, have already delivered 5 percent growth in market-cap weighted earning per share for the 2016 financial year, although the overall market is set to post an 8 percent drop, according to a UBS research.

"Aggregate earnings trends look set to improve in FY17," UBS said. "The bottom-up and aggregate earnings picture going into FY17 looks reasonable with the domestic economy still defying the naysayers."

Healthscope was among the top gainers on the benchmark, posting its biggest percentage gain in six months.

The "Big Four" Australian banks rose with Commonwealth Bank (>> Commonwealth Bank of Australia) and National Bank of Australia (>> National Australia Bank Ltd.) up about 0.8 percent. ANZ Banking (>> Australia and New Zealand Banking Group) and Westpac (>> Westpac Banking Corp) climbed more than 1 percent.

Major miners BHP Billiton (>> BHP Billiton Limited) and Rio Tinto (>> Rio Tinto Limited) were up 0.9 percent and 0.4 percent respectively.

Energy shares were mixed with Oil Search (>> Oil Search Limited) off about 1 percent after earnings were hit by a slump in oil prices while Origin (>> Origin Energy Ltd) and Santos (>> Santos Ltd) adding 0.6 percent.

For more individual stocks activity click on [STXBZ]

New Zealand's benchmark S&P/NZX 50 index <.NZ50> inched higher on Tuesday, continuing its ascent to a record of 7,481.68 points.

Honey supplier Comvita Ltd (>> Comvita Ltd) slipped as much as 5.5 percent to its lowest since April 5 after it failed to offer any earnings guidance and flagged uncertainties due to new regulations in China, one of its largest markets.

a2 Milk Co Ltd (>> A2 Milk Company Ltd) added 3.6 percent following a new five-year supply agreement with Synlait Milk (>> Synlait Milk Ltd) for the production of a2 Platinum infant formula.

Fletcher Building (>> Fletcher Building Limited) was up 1 percent while Contact Energy (>> Contact Energy Limited) and Z Energy both rose about 0.7 percent each.

(Reporting by Swati Pandey; Editing by Eric Meijer)

By Swati Pandey