(Updates to close)
Dec 21 (Reuters) - Australian shares closed at their highest in more than 16 months in thin trade on Wednesday, led by materials and financial stocks as investor sentiment was boosted by Wall Street's record run overnight.
The NASDAQ Composite rose to record highs while the Dow Jones industrial average flirted with the 20,000 point mark. The rally was fuelled by financials.
The S&P/ASX 200 index rose 0.4 percent, or 22.43 points, to 5,613.5, its highest closing level since Aug. 5, 2015.
Financial stocks followed suit to close at their highest in over 16 months, in step with the gains of their U.S. counterparts.
National Australia Bank Ltd and Australia and New Zealand Banking Group Ltd led the pack, both closing at multi-month highs.
Miners jumped 1.4 percent, aided by recovering copper and gold prices.
BHP Billiton Ltd lifted the main index most, gaining over 1 percent, while Rio Tinto Ltd added 1.5 percent.
Energy stocks gained with oil prices nudging up over expectations of reduction in U.S. crude inventory ahead of data to be announced later in the day.
Oil Search Ltd gained about 1 percent and Whitehaven Coal Ltd was up 3 percent.
New Zealand's benchmark S&P/NZX 50 index ended 0.19 percent higher at 6,802.76. There were gains in consumer and materials stocks, but utilities, real estate and health care ended down.
a2 Milk Company Ltd gained 5.9 percent, while Fletcher Building Ltd rose 3.4 percent, its highest intraday jump since Nov 14. (Reporting by Geo Tharappel in Bengaluru; Editing by Eric Meijer)