(Reuters) - Australian shares advanced on Wednesday, unfazed by a slip in BHP Billiton, as the "Big Four" banks surged after declaring comfort with new capital rules designed to make them "unquestionably strong".
The S&P/ASX 200 index <.AXJO> ended up 44.71 points, or 0.8 percent to 5,732.1. On Tuesday, the benchmark dropped 1.1 percent.
The financial sector accounted for nearly three-quarters of the gains on the bourse. The sub-index of financial stocks <.AXFJ> ended 2.6 percent higher.
Shares of the Big Four banks, which represent over 80 percent of the country's lending, leapt between 3.0 and 3.9 percent after the Australian Prudential Regulation Authority (APRA) said banks were required to raise common equity Tier 1 ratio, a key gauge of a lender's strength, to at least 10.5 percent by January 2020.
The banks said they were well placed to meet the capital requirements.
The benchmark's biggest laggard was mining giant BHP Billiton <BHP.AX>. It tumbled 2.6 percent, its biggest one-day fall in four weeks, after reporting output cuts in coal and petroleum for the year.
Rio Tinto <RIO.AX> also dragged material stocks lower, on extended losses from the previous session after reporting disappointing results.
New Zealand's benchmark S&P/NZX 50 index <.NZ50> rose 25.42 points, or 0.3 percent, to 5,736.1 at 0606 GMT.
Financial and telecom stocks were the biggest boosts while consumer staples were among the two main drags on the index. Westpac Banking Corp <WBC.NZ> and Australia and New Zealand Banking Group <ANZ.NZ> led gainers in the benchmark.
(Reporting by Hanna Paul; Editing by Richard Borsuk)
