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Australian shares posted moderate gains on Thursday, helped by financials and mining stocks, amid improved risk appetite as comments from Federal Reserve officials rekindled hopes of an interest rate cut.
The benchmark S&P/ASX 200 index closed up 0.5% at 7,817.300, after falling 1.3% on Wednesday.
The market was encouraged by softer-than-expected U.S. services sector data and Fed chair Jerome Powell's comments, which aided sentiment around rate cuts.
"If the economy evolves broadly as we expect," Powell said, adding that the Fed might go for easing its monetary stance "at some point this year."
Fed fund futures are seeing a 62% chance of a June rate, with roughly 73 basis points of cuts priced in for the year.
In Sydney, rate-sensitive financials led gains with an 0.4% growth, with three of the "big-four" lenders climbing between 0.5% and 0.8%. National Australia Bank traded flat.
Miners advanced 0.3%, with lithium producer Sayona Mining gained 10.53% while Chalice Mining rose 7.8%.
Another rate-sensitive sector, real estate rose 0.7% with integrated property group Goodman Group gaining 0.5%.
Brad Smoling, managing director of Smoling Stockbroking, said banking and real estate are responding to Powell's statements.
However, "he (Powell) will not move on rates until he sees a further fall in inflation. This puts a huge, continued pressure on debt servicing areas in the economy," Smoling added.
Gold stocks rose 1.2% as bullion prices hit a fresh record high, with Evolution Mining and Northern Star adding 1.1% and 0.8%, respectively.
New Zealand's benchmark S&P/NZX 50 index fell 0.04%to finish the session at 12,035.2600.
The country's Prime Minister Christopher Luxon allowed companies to use overseas building products, a step he expects would reduce prices and increase competition. (Reporting by Rajasik Mukherjee in Bengaluru; Editing by Varun H K)