SYDNEY/WELLINGTON, March 9 (Reuters) - Australian shares edged higher on Wednesday, a day after posting their first loss in seven sessions, as traders shrugged off pressure from a drop on Wall Street and weaker oil prices.
Australia's S&P/ASX 200 index was up 0.26 percent at 5,123.0 by 0206 GMT. The index fell 0.68 percent on Tuesday, easing off a two-month high hit in the previous session.
"Some of the initial burst of selling has evaporated and we have seen some bargain buying," said Chris Conway, head of research and trading at Australian Stock Report.
"We had this amazing run where we were higher on the back of rising oil prices. We had a bit of wobble, but I think people are looking it and are still positive."
Financials led the Australian index higher. Shares in National Australia Bank, Westpac Banking Corp and Australia and New Zealand Banking Group all rose more than 1 percent.
Resources stocks edged lower, but were off the lows of the session, as stronger iron ore prices provided some support.
A dip in oil prices weighed on the energy sector, with Woodside Petroleum Ltd and Santos Ltd both dropping more than 3 percent.
New Zealand's benchmark S&P/NZX 50 index edged higher. The index was up 0.1 percent, or 5 points, at 6,451.7, easing slightly after hitting a fresh all-time high of 6,456.44.
The biggest losers were rubber goods manufacturer Skellerup and NZ Refinery as the stocks traded ex-dividend. Skellerup fell 5.49 percent while NZ Refining lost 4.41 percent.
Electricity infrastructure company Vector lost 1.22 percent and Auckland Airport fell 1.09 percent.
A2 Milk led the gains, rising 2.81 percent, and insurance company Tower increased 1.19 percent.
Shares in Fonterra's fund, which provides investor exposure to the farmer-owned dairy exporter, fell after critical media coverage in the wake of the company's announcement on Tuesday that it was cutting its forecast payout to farmers.
"Fonterra's been in the news quite a bit at the moment, so it could be influencing investors," said Grant Williamson, broker at Hamilton Hindon Greene. (Reporting by Colin Packham and Charlotte Greenfield; Editing by Savio D'Souza)