Australia: Shares rise most in 4 weeks on broader economic recovery optimism

[BENGALURU] Australian shares rose on Wednesday by their most in four weeks, as positive data from the world's two top economies fuelled recovery optimism and eclipsed a worse-than-expected domestic economic contraction.

The S&P/ASX 200 index snapped three straight sessions of losses, settling 1.8 per cent higher at 6,063.20 in its biggest one-day percentage gain since Aug 4.

Investors looked past Australia's biggest economic contraction on record to focus on signs of a broader economic recovery following upbeat manufacturing data from the United States and China.

"The GDP numbers are backward-looking and the share market is more forward-looking," said James Tao, an analyst at CommSec.

"A lot of expectation around the country, except for the state of Victoria, of course, is that Australia is in that recovery stage now. You might still see a bit of a drag in the third-quarter GDP due to the Victorian lockdowns."

Treasurer Josh Frydenberg, however, said the lockdowns in Victoria would weigh "heavily" on the September-quarter gross domestic product as data showed Australia's economy shrank 7 per cent in the June quarter, compared with the previous quarter.

Heavyweight miners finished 1.8 per cent higher as iron ore futures climbed on expectations of a further pickup in steel output and demand in China.

Top miners BHP Group and Rio Tino added 2.7 per cent and 1.6 per cent, respectively.

Industry giant CSL climbed 2 per cent and accounted for a bulk of the healthcare sub-index's gains.

Commonwealth Bank of Australia and Westpac Banking Corp were the biggest gainers among financials.

In individual stock moves, Qantas Airways ended 1.5 per cent higher after rival Virgin Australia said it expected to lose domestic market share under its new business plan as it exits unprofitable routes.

New Zealand's benchmark S&P/NZX 50 index rose 0.9 per cent to finish the session at 11,902.98, bolstered by financial and healthcare stocks.

REUTERS