(Reuters) - Australian shares rallied on Monday, with financials accounting for most of the gains, while materials rose on the back of firmer commodities prices.
The S&P/ASX 200 index <.AXJO> ended up 0.3 percent or 17.20 points at 5,886.0. The benchmark declined 0.2 percent on Friday.
Financial stocks <.AXFJ> rose 0.7 percent, brushing aside concerns that Australia's competition watchdog wants to increase penalties imposed on the 'Big Four' major banks to "hundreds of millions.
The proposed heavy fines may be enforced and followed by job cuts, but the wider industry would survive, this would encourage "bottom fishers" to buy high-dividend stocks when their share prices are very low, said Dale Raynes, Associate Director at CPS Capital.
Top lender Commonwealth Bank of Australia <CBA.AX> jumped 0.9 percent, while others in the 'Big Four' firmed between 0.9-1.4 percent.
Materials stocks, especially miners, supplemented the gains. The Australian metals and mining index <.AXMM> climbed 0.9 percent to a more than three-month high, helped by firmer prices for iron ore. [IRONORE]
Global miner BHP <BHP.AX> strengthened 1.2 percent to its highest since Feb. 20, while its rival Rio Tinto Ltd <RIO.AX> rose 1.4 percent.
Australia's biggest gold miner, Newcrest Mining <NCM.AX>, jumped 2.8 percent to a six-week high, having gained approval to use the first 200 metres of its Cadia Hill mine's open pit as a tailings storage facility. The flagship mine restarted processing earlier this month.
In New Zealand, the benchmark S&P/NZX 50 index <.NZ50> declined 0.2 percent or 19.6 points to finish the session at 8,303.62.
Dairy firm a2 Milk Company Ltd <ATM.NZ> accounted for most of the losses, falling 3.1 percent, its biggest percentage drop in nearly three weeks.
(Reporting by Aditya Soni in Bengaluru; Editing by Kim Coghill)
