March 10 (Reuters) - Australian shares rose on Friday as rising odds of a U.S. interest rate hike boosted banks, with healthcare stocks complementing the gains as investors cheered news that a Republican U.S. health plan had cleared its initial hurdles.
The S&P/ASX 200 index rose 0.3 percent, or 17.99 points, to 5,759.2 by 0119 GMT.
Financials outperformed other sectors, with the 'Big Four' banks trading in the green.
The benchmark financial index rose for a fifth straight session, gaining as much as 0.7 percent, its highest level in two months. Shares of Commonwealth Bank of Australia rose to a more than two week high.
"Pretty much the market is expecting them (the Fed) to raise rates. I think what's more important is the fact that they are probably going to upgrade their guidance, which is positive for the financials," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.
The fact that U.S. rates are going up and the bond yields are going up means that the banks here would have an argument for putting up rates, he added.
Federal Reserve Chair Janet Yellen indicated recently the Fed was set to raise rates at its meeting on March 14-15 if employment and other economic data hold up.
U.S. job data later in the global day could provide more clarity on the Fed's plans. Economists now expect a rate increase at its meeting next week and two more later this year, according to latest Reuters poll.
Adding to the support for the benchmark index were healthcare stocks, with shares of biotherapeutics firm CSL Ltd surging to a record high.
The fact that the Republican healthcare bill has cleared its its initial hurdles is positive for healthcare stocks, particularly those which have significant exposure to the U.S. market such as biotherapeutics firm CSL, said Gary Burton, an analyst with IG Markets.
CSL shares rose 1.1 percent.
Hospital stocks in the U.S. gained after the Republican plan backed by President Donald Trump to overhaul the U.S. healthcare system cleared its first hurdles in Congress on Thursday.
Australia's gains were capped by material stocks, which suffered after a further decline in commodity prices.
Iron-ore mining gaints BHP Billiton and Rio Tinto slipped for a fourth straight session.
Gold stocks also traded lower, with the benchmark index hitting a two-month low.
However, energy stocks were up tracking its peers on Wall Street, despite an overnight decline in oil prices Santos Ltd ticked up 0.9 percent, while Origin Energy Ltd added 0.8 percent.
New Zealand's benchmark S&P/NZX 50 index rose 0.3 percent or 23.75 points to 7,164.73 by 0115 GMT. Financials and consumer stocks led the gains.
Fletcher Building Ltd was the best performer, rising 2.5 percent. Shares of SKY Network Television Ltd was up 1.9 percent.
Reporting by Anusha Ravindranath in Bengaluru; Editing by Kim Coghill