(Updates to close)
March 28 (Reuters) - Australian shares closed at their highest in nearly two years on Tuesday, buoyed by a rally in financials with the recent round of mortgage rate hikes driving bullish sentiment across the banking sector.
The S&P/ASX 200 index climbed 1.3 percent, or 74.5 points, to 5,821.2, its highest close since May 2015.
The rally was broad-based with advancing issues outnumbering declining ones by 9.21 to 1.
Financials accounted for more than half of the gains, with the country's biggest mortgage lender, Commonwealth Bank of Australia, rising 2.2 percent to a more than one-month closing high.
Australia and New Zealand Banking jacked up mortgage rates for speculative buyers on Friday as part of an intensifying campaign by regulators to hose down a heated housing market.
Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corp made similar hikes earlier this month.
Among other gainers, Quintis Ltd leapt 13.6 percent after the sandalwood plantation group said its managing director had resigned and would consider making a takeover offer for the company together with an unnamed international group.
The move follows the publication last week of a highly negative report by short-seller Glaucus Research that knocked down Quintis shares by about 25 percent.
New Zealand's benchmark S&P/NZX 50 index nudged up 0.04 percent, or 2.52 points, to finish the session at 7,065.23.
Gains in healthcare and utilities were offset by declines in consumer staples and industrials.
Air New Zealand was the biggest percentage gainer on the index, rising 3.1 percent. (Reporting By Shashwat Pradhan in Bengaluru; Editing by Subhranshu Sahu)