Australian shares gained modestly on Wednesday, lifted by financial and technology stocks on optimism that the domestic and U.S. central banks were done with their relentless rate hike cycle.

The S&P/ASX 200 index rose 0.3% to 6,995.400 points. It fell 0.3% on Tuesday.

The Reserve Bank of Australia (RBA) lifted domestic rates to an over 12-year high on Tuesday but said that going forward it will assess data more closely to decide if even more tightening is required.

"What caught the markets' attention was a much less-hawkish tightening bias," analysts at National Australia Bank (NAB) wrote in a note.

NAB now expects another 25 basis points hike, most likely in February and said rate cuts are unlikely until November 2024.

In Sydney, rate-sensitive financials led gains on the benchmark, rising 0.7%. The 'big four' banks rose between 0.4% and 1.5%. NAB, in line with the central bank, raised rates by a quarter of a percentage point.

Technology stocks gained for the sixth straight session, rising 1.9%, tracking gains in their overseas peers.

U.S. stocks rose overnight, led by megacap stocks, as Treasury yields retreated on expectations that the Federal Reserve will not raise rates further.

However, there are concerns that the Fed might keep rates at their current level for longer, following hawkish comments from some Fed officials. The focus now is on Fed Chair Jerome Powell, who is set to speak at an event on Wednesday and Thursday.

On the domestic front, mining stocks fell 1.8% on the day, logging their lowest close since Oct. 31, as iron ore prices extended declines.

Among individual stocks, James Hardie Industries jumped 13.8% after the world's largest fibre cement maker posted a record second-quarter profit.

New Zealand's benchmark S&P/NZX 50 index ended 0.6% lower at 11,151.3000 points. (Reporting by Adwitiya Srivastava in Bengaluru; Editing by Savio D'Souza)