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Australia: Shares rise despite GDP contraction

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[SYDNEY] Australian shares ended Wednesday higher on the back of Wall Street's record close, led by the financial and materials sectors, even after news that the Australian economy contracted last quarter.

Data issued on Wednesday, showed that the economy shrank 0.5 per cent last quarter as businesses, consumers and government all cut back on spending.

Investor sentinment, though, was buoyed by hopes that policymakers may provide more monetary or fiscal stimulus and as Wall Street climbed on Tuesday with telecom majors and banking sector driving the gains.

The S&P/ASX 200 index closed 49.4 points, 0.9 per cent, higher at 5,478.1.

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The financial index was up 1.2 per cent with the four major banks gaining over 1 per cent each.

Global miner BHP Billiton rose nearly 1 per cent while Rio Tinto and Fortescue Metals gained 2.8 and 4 per cent respectively.

But the energy index was down over 1 percent, as oil prices fell, with the decline led by Origin Energy which fell to its worst day in nearly a month.

Qantas Airways on the other hand rose 1.9 per cent on cheaper fuel.

New Zealand's benchmark S&P/NZX 50 index ended 0.3 per cent, or 21 points, lower to finish the session at 6889.77.

The decline was led by utilities and health care sectors as Meridian Energy fell over 1 per cent and Ryman Healthcare shed 0.6 per cent.