(Updates to close)
June 22 (Reuters) - Australian shares rose on Thursday, gaining support from financials and materials for a rebound from the previous session's biggest sell-off this year.
The S&P/ASX 200 index closed 0.7 percent or 40.28 points higher to at 5,706.00. On Wednesday, the benchmark dropped 1.6 percent.
Stocks regained "a bit of ground" on Thursday as there was bargain-hunting in some of the biggest banks, said James McGlew, executive director of corporate stock broking at Argonaut.
Financials accounted for more than half the index gains with "Big Four" lenders each rising more than 1 percent.
QBE Insurance Group Ltd, which hit over a six-month low on Wednesday, recouped early losses to ended the session 1.3 percent higher.
Gains in iron ore and gold prices helped push the miners up.
Fortescue Metals Group Ltd closed 3.8 percent higher and Newcrest Mining rose 1.5 percent.
New Zealand's benchmark S&P/NZX 50 index ended 0.5 percent or 36.58 points higher to finish at 7,563.69. Utilities and healthcare stocks lead index gains, with electricity retailer Contact Energy Ltd ending 2.3 percent higher to its highest close in over 10 months and Fisher & Paykel Healthcare Corporation Ltd rising 1.2 percent.
Consumer discretionary and energy stocks ended lower. (Reporting by Sindhu Chandrasekaran in Bengaluru; Editing by Richard Borsuk)