* Energy stocks rise as oil recovers
* RBA expected to cut rates on Tuesday
* Nufarm soars on South America asset sale
By Nikhil Nainan
Sept 30 (Reuters) - Australian shares edged higher on Monday as mining and energy stocks gained on higher commodities and oil prices, though uncertainty in the U.S-China trade war kept some investors cautious.
The S&P/ASX 200 index was up 0.1% at 6,725.3, as of 0153 GMT. The benchmark gained 0.6% on Friday and is set to end the month higher, following a sharp drop in August that snapped a seven month winning streak.
Trading was light after news on Friday that the U.S. administration is considering the possibility of delisting Chinese companies from U.S. stock exchanges.
“There’s uncertainty about what the week might bring... trade remains a key issue for markets globally and locally here,” said Michael McCarthy, chief strategist at CMC Markets and Stockbroking.
He added that while the news over the weekend was a concern, there was no evidence of a panic yet ahead of expected trade talks between the United States and China later this month.
Mining stocks dominated the gains, with Rio Tinto, rising as much as 1.3%, while bigger rival BHP Group firmed 0.6%.
The rally in miners was underpinned by firmer copper prices, which rose after a private business survey showed China’s factory activity unexpectedly expanded in September.
Energy stocks climbed 1.1% as oil prices recovered from a two-week low touched in the last session.
Top oil explorer and producer Woodside Petroleum gained 1.4%.
Shares of Nufarm surged 55.6% to their highest in over a year and were the top gainer after the agricultural chemicals supplier offloaded its South American business for A$1.19 billion ($804.08 million).
However, the country’s four biggest banks fell between 0.1% to 0.6%, capping gains on the main index.
Markets are pricing in an expected interest rate cut by Australia’s central bank on Tuesday to help support the stuttering economy.
New Zealand’s benchmark S&P/NZX 50 index rose 0.2% to 10,860.61.
a2 Milk Company rose as much 1.7%, but gains in the broader market were capped by a 0.6% drop in Fonterra .
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$1 = 1.4799 Australian dollars Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Aditya Soni