(Reuters) - Australian shares ended higher on Thursday, recovering from a one-month low hit in the previous session, after comments from U.S. President Donald Trump revived optimism about trade talks between Washington and Beijing.
The S&P/ASX 200 index <.AXJO> firmed 1.2% to 6,683.00 at the close of trade. The benchmark fell 1.6% to its lowest in a month on Wednesday.
Trump on Wednesday said that discussions with Beijing were going "very well," which eased concerns of investors who were jittery after his remarks on Tuesday that a trade deal might have to wait until after the 2020 U.S. presidential election.
Trump's remarks on Tuesday, which raised the prospect of a longer trade dispute between Washington and Beijing, had hurt stock markets around the world.
"The on/off noise we continue to hear on this subject is unlikely to disappear anytime soon and is set to continue dictating broader market sentiment," analysts at ING said in a note.
Most major component sub-indexes on the Australian benchmark advanced, following a negative end on Wednesday.
The financial sector <.AXFJ> closed 1.4% higher, its best session since Oct. 16, buoyed by the 'big four' banks. Shares of Australia and New Zealand Banking Group <ANZ.AX>, which were on a trading halt for most of the day, ended 2.1% higher.
The stocks rose despite New Zealand central bank announcing an increase to capital ratio requirements for banks, a move that is expected to hurt the bottom line of top Australian lenders who dominate the domestic market there.
In the mining space, diversified players and index heavyweights BHP Group <BHP.AX> and Rio Tinto Ltd <RIO.AX> closed 1.6% and 0.8% higher, respectively, helping the sector index <.AXMM> rise about 1% at close.
Oil and gas heavyweight Santos <STO.AX> climbed 4.2% at close, its best day since Oct. 14, while Woodside Petroleum <WPL.AX> advanced nearly 2%, marking its biggest daily percentage gain since Oct. 24. The duo helped the energy sub-index <.AXEJ> finish 1.6% higher.
Petrol pump and convenience store operator Caltex Australia <CTX.AX>, which recently snubbed a A$34.50 per share takeover bid from Canada's Alimentation Couche-Tard <ATDb.TO>, ended flat, with shares remaining under offer price for its third straight day.
Meanwhile, New Zealand's benchmark S&P/NZX 50 index <.NZ50> also advanced 0.4% or 47.92 points to finish at 11,257.79.
TV broadcaster Sky Network Television <SKT.NZ> ended 2.5% higher, while utilities provider Infratil <IFT.NZ> strengthened 2.2% at close, hitting its highest since Nov. 6.
(Reporting by Nikhil Subba in Bengaluru; editing by Uttaresh.V)
