Aug 31 (Reuters) - Australian shares were higher on Thursday as investors bought into sectors such as financials and materials which had recently come under heavy selling.
The S&P/ASX 200 index gained 0.7 percent, or 38.379 points, to 5708.1 by 0310 GMT.
“What’s popular today is what was least popular during the selloff in the first three days this week, when financial, healthcare and materials stocks were under a lot of pressure,” said Michael McCarthy, chief market strategist at CMC Markets.
“What we’re seeing now is buying into the weaker stocks.”
The financial index gained 0.7 percent in line with a rise on Wall Street’s S&P 500 Financial index
The country’s big four banks advanced between 0.5 percent and 1 percent, with Commonwealth Bank of Australia up as much as 0.8 percent after trading at a nine-month low earlier in the week.
CBA shares fell after the Australian Prudential Regulation Authority (APRA) on Monday said it would establish an inquiry into the bank, following its alleged breaches of money-laundering and counter-terrorism finance rules.
The material index climbed 0.9 percent with Rio Tinto up as much as 1.7 percent and BHP Billiton Ltd rising as much as 1.9 percent.
“I think the commodity markets are looking to the fact that the main reason commodity prices fell overnight was strength in the US dollar. There’s no change to the demand scenario globally, nor any on the supply side,” McCarthy said
On the losing ledger, energy stocks fell with the sector index dropping 1.5 percent.
Gasoline prices rose as flooding from tropical storm Harvey knocked out almost a quarter of U.S. refineries, while crude oil prices fell on the resulting drop in demand.
Woodside Petroleum Ltd lost as much as 1.7 percent while Oil Search Ltd shares slid nearly 2 percent.
New Zealand’s benchmark S&P/NZX 50 index were 0.2 percent higher, or 17.18 points, to 7,792.38. The index is on track to end its eighth consecutive month in the black.
Gains in health care and industrial stocks pulled up the index.
Ryman Healthcare Ltd rose 1.2 percent and Auckland International Airport Ltd edged 0.6 percent higher.
Skycity Entertainment Group Ltd fell as much as 3.6 percent, weighing on the index.
Reporting by Nicole Pinto; Additional reporting by Ambar Warrick in Bengaluru; Editing by Shri Navaratnam