March 2(Reuters) - Australian shares rose on Thursday and looked to set to snap a five-day losing streak as signs of stronger global manufacturing activity and President Donald Trump's pledges to boost the U.S. economy encouraged investors to return to the market.
The S&P/ASX 200 index surged 1.2 percent, or 67.50 points to 5,772.3 by 0100 GMT. The benchmark recorded its highest one-day gain in over 7 weeks. It fell 0.1 percent on Wednesday.
On Tuesday, in his first speech to the Congress, President Trump adopted an open stance towards immigration reform and said he wants a healthcare overhaul, broad tax cuts and a $1 trillion public-private initiative to rebuild degraded roads and bridges in the U.S.
While Trump gave few new details on his tax or spending plans, investors were encouraged by what they saw as a less combative tone as he tries to push his agenda through a Congress reluctant to widen the government's budget deficit.
On Wall Street, the Dow Jones Industrial Average .DJI blasted through the 21,000-point mark for the first time.
"Trump’s speech to Congress didn’t create any new concerns, it didn’t create new information either so there was nothing really negative coming out of that so I think its an ongoing commitment to fiscal stimulus," said Damien Hennessy, co founder of Heuristic Investment Systems.
Financial and material stocks swept gains in the upbeat benchmark index where the world's biggest miner by market capitalization BHP Billiton, gaining over 3 percent, led gains.
Mining giant South32 soared 10 percent at one point to record its biggest one-day gain in over a year as aluminium prices hit their highest since May 2015.
Copper prices touched their highest in over a week as manufacturing data from China displayed potential for strong demand.
The ASX 300 Metals and Mining index snapped a 6-day losing streak and surged 3.3 percent.
Nickel miner Independence Group soared as much as 8.9 percent to record its biggest one-day gain in 3 months.
"The materials sector’s really reflecting the global growth, particularly the better PMI indices data from China today," Hennessy said.
China's factory activity expanded faster than expected in February as domestic and export demand picked up, adding to signs that the global economy is regaining momentum.
Financial stocks also cheered the benchmark, with the "Big Four" banks dominating gains, rising 1.2 percent to 1.3 percent.
Australia's No.3 lender by assets Westpac Banking Corp gained as much as 2 percent to its highest in 18 months.
Global banking shares were also buoyed by growing expectations of a U.S. interest rate hike later this month.
At the same time, supermarket operator Woolworths fell 1.4 percent at one point after the stock traded ex-dividend while telecom giant Telstra extended losses from the previous session, down 1.4 percent, after trading ex-dividend.
New Zealand's benchmark S&P/NZX 50 index gained 0.7 percent or 49.84 points to 7,198.62 at 1215 GMT. The benchmark hit its highest since October 2016.
Utilities and healthcare stocks lifted the benchmark as retirement village operator Metlifecare gained 2.5 percent.
Retail services provider Warehouse Group was the biggest decliner in the benchmark. (Reporting by Hanna Paul in Bengaluru; Additional reporting by Ambar Warrick; Editing by Kim Coghill)