Australian shares reclaimed lost ground to close higher on Wednesday, buoyed by healthcare stocks, as a weaker local currency boosted the export-reliant sector.
The S&P/ASX 200 index was up 0.5% at 6,778.8 points at the close of trade, after falling as much as 0.15% earlier in the session.
The Australian dollar weakened 1.5% overnight, as investors abandoned bets on higher interest rates domestically, while tighter coronavirus lockdowns in Europe pushed bond yields down globally. [AUD/]
"I think the weaker Australian dollar is probably helping our exports and we are seeing a bit of rotation into the safety stocks," said Damian Rooney, director of equity sales at Perth-based Argonaut.
The safe-haven U.S. dollar strengthened to a four-month high on Wednesday as concerns over a third COVID-19 wave in Europe and potential U.S. tax hikes sapped risk appetite and weakened other currencies. [.N][USD/]
In Australia, the healthcare sector, which is heavily exposed to the U.S. market, ended 1.9% higher as CSL Ltd rose 1.9% to close at a three-week high, while hearing implant maker Cochlear Ltd added 3.7%.
Technology stocks advanced 0.4%, with buy-now-pay-later company Xero hitting a three-week high after acquiring Swedish e-invoicing firm Tickstar.
Heavyweight financial stocks climbed 0.4%, with Commonwealth Bank of Australia gaining 1.9% to mark its best session in more than three weeks.
Bucking the upward trend, energy stocks finished 0.9% down, with Santos Ltd and Woodside Petroleum falling 1.5% and 1.1%, respectively.
Santos said it expects to make a final investment decision on its Barossa project in the coming weeks after the oil and gas producer postponed the call last year.
New Zealand's benchmark S&P/NZX 50 index closed 0.3% higher at 12,358.88 points. Electricity retailer Mercury NZ Ltd was the top gainer on the bourse.
Westpac Banking Corp said that it was in the early stages of assessing a possible demerger of its New Zealand business.
(Reporting by Harish Sridharan in Bengaluru, Editing by Sherry Jacob-Phillips)
