May 10 (Reuters) - Australian shares turned higher on Wednesday, paring earlier losses after rising oil prices lifted mining giant BHP Billiton, while an uptick in metals and gold underpinned stocks in those sectors.
The S&P/ASX 200 index rose 28.697 points, or 0.5 percent to 5,868.6 by 0320 GMT.
Gains on the index were driven by BHP Billiton, which advanced 1.8 percent after oil futures rose in Asian trading following a Reuters report on Saudi Arabia cutting supplies to the region.
State-owned Saudi Aramco will reduce oil supplies to Asian customers by about 7 million barrels in June, a source told Reuters, as part of OPEC's agreement to reduce production and as it trims exports to meet rising domestic demand for power during the summer.
BHP Billiton's shares appear sensitive to oil prices, with forty percent of its share price variability linked to its petroleum business, said Chris Weston, an institutional dealer at IG Markets.
Among other miners, Fortescue Metals Group climbed more than 2 percent after Shanghai steel futures rose for a third straight day on Wednesday, supported by worries over tighter supply.
Separately, the miner said it had raised $1.5 billion in a high-yield bond offering, $500 million more than originally sought, due to strong investor demand.
In the gold space, Newcrest Mining and Northern Star Resources rose 1.4 percent and 3.4 percent respectively after prices for the yellow metal edged up from an eight-week low.
The financial index tried to recover from losses earlier in the session, tacking on 0.2 percent as investors pondered new taxes slapped on big banks by the government in its budget proposals unveiled late on Tuesday.
"I think there is a little bit of technical buying in there...People have moved past yesterday's lows and are increasing their exposure towards the banking sector," Weston added.
On the downside, CSR Ltd tumbled as much as 13 percent, posting its biggest intra-day percentage fall in nearly eight years after the company failed to meet investors' high expectations on full-year earnings.
"(CSR's) results came in line with company guidance, may be a little bit above the mid-point, but it was priced for something better, to come right at the top end of the company's guidance," said Ben Le Brun, market analyst at Optionsxpress.
New Zealand's benchmark S&P/NZX 50 index inched up 0.03 percent, or 2.46 points, to 7,418.58.
Consumer staples sector led the gains after data showed that New Zealand's electronic retail card spending rose 1.1 percent in April, while actual sales rose 4.5 percent from the same month a year ago.
Heartland Bank Ltd was the biggest gainer on the index, advancing as much as 2.9 percent to hit a record high.
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Reporting by Shashwat Pradhan in Bengaluru; Additional reporting by Susan Mathew; Editing by Shri Navaratnam