Dec 7 (Reuters) - Australian shares rose on Wednesday even after data showed the economy contracted for the first time in five years last quarter, underpinned by hopes policy makers may provide more monetary or fiscal stimulus and on solid gains in Wall Street.
The third quarter gross domestic predict report showed the Australian economy contracted 0.5 percent, while the annual pace of growth slowed to 1.8 percent from 3.3 percent in the second quarter.
"The poor GDP data has people expecting more accommodating policy," said Tony Farnham, an economist with Patersons Securities.
"The accommodation can be either through friendlier monetary policy or alternatively it could be increased fiscal policy, by that I mean increased government expenditure ideally in the capex side and infrastructure side."
The S&P/ASX 200 index climbed 0.7 percent, or 37.7 points, to 5,466.4 by 0105 GMT.
Overnight, U.S. S&P financial sector rose nearly 1 percent, while the broader S&P 500 index gained 0.34 percent.
U.S. financials have climbed more than 15 percent after the Nov. 8 election catapulted Donald Trump to the White House, as expectations that Trump would oversee lower corporate taxes and reduced regulations boosted the banking sector.
The U.S. momentum has had a knock-on impact on Australia's benchmark financial index, which has risen nearly 9 percent in that period.
The index was up over 1 percent, with the "Big Four" lenders leading the charge; ANZ and Westpac added more than 1.2 percent each.
Materials also supported the broader index, as steel and iron ore futures in China rose for a fourth straight day, backed by hopes of pick up in demand the world's top consumer of both commodities.
Mining giants BHP Billiton and Rio Tinto rose 1 percent and 2 percent, respectively, while Fortescue Metals Group added 2.1 percent.
At the other end, oil stocks saw some losses on the back of declines in oil prices after data showing record high production in the OPEC group fed skepticism on the cartel's Nov. 30-agreement to cut output.
Origin Energy dropped 3.8 percent, its worst day in nearly a month.
Declines in gold prices drove the benchmark gold index down.
New Zealand's benchmark S&P/NZX 50 index fell 0.1 percent, or 9.25 points to 6,901.1.
Losses were led by telecom and utilities stocks.
Spark New Zealand fell as much as 2.1 percent, while energy retailer Mercury NZ fell a percent.
For more individual stocks activity click on (Reporting by Suhail Hassan Bhat in Bengaluru; Additional Reporting by Rushil Dutta in Bengaluru; Editing by Shri Navaratnam)