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Australia, New Zealand shares rally as US data could crimp Fed hike chances

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[BENGALURU] Australian shares pushed higher on Friday, driven by banking stocks, with weak US data dimming the chances of an interest rate hike by the Federal Reserve next week.

The S&P/ASX 200 index had jumped 1.1 per cent, or 59.04 points, to 5,298.9 by 0210 GMT, recording its biggest intra-day percentage gain since July.

US August retail sales fell more than expected amid weak purchases of automobiles and a range of other goods.

The Commerce Department said retail sales dropped 0.3 per cent after edging up 0.1 per cent in July.

"It (the climb in Australian markets) provides pretty clear evidence, if that was needed, that next week's central bank meetings, particularly the Fed meeting, are dominating the short-term market thinking," said Ric Spooner, chief market strategist at CMC Markets.

Investor sentiment also took a hit from other data on Thursday showing a drop in US manufacturing output last month.

The Swiss National Bank and the Bank of England on Thursday held interest rates steady.

Financial stocks accounted for nearly half of the gains on the Australian benchmark. The 'Big Four' banks gained 1 per cent to 1.5 per cent in early trading.

Coal miner Whitehaven Coal was the biggest percentage gainer on the index, rising as much as 8.5 per cent to hit a more than 3-year high.

Energy stocks rose more than 2 per cent as oil prices climbed overnight.

Oil explorer Woodside Petroleum jumped more than 1 per cent, while Santos snapped eight-straight sessions of losses to rise 5 per cent.

Mining giant BHP Billiton extended gains to rise 1 per cent and Fortescue Metals Group gained 2 per cent.

Shares in Telstra Corporation, Australia's largest telecom company, advanced more than 1 percent.

New Zealand's benchmark S&P/NZX 50 index snapped six-straight sessions of losses to rise 0.8 per cent, or 58.3 points, to 7,254.54.

Telecoms, industrials and utilities pushed the index higher.

Consumer confidence in New Zealand rose in September to its highest level since January, a survey showed.

Skycity Entertainment Group and Spark New Zealand both advanced 2 per cent.

Power generation company Meridian Energy was among the top percentage gainers on the benchmark, climbing more than 3 per cent to record its biggest intra-day percentage rise since June.