June 20, 2018 / 2:52 AM / a year ago

REFILE-Australian shares hit 10-year high as banks rally; NZ rises

(Fixes headline typo)

* Aussie shares at highest since Jan 2008

* Financials cheer weaker Aussie dollar

* Telstra slumps under pressure

* NZ rises on consumer staples

By Aditya Soni

June 20 (Reuters) - Australian shares climbed to their highest in more than 10 years on Wednesday, led by a rally in banks, but Telstra’s fall after it flagged major job cuts and asset sales in a “strategic reset” capped the gains.

The S&P/ASX 200 index rose 0.8 percent or 46.5 points to 6,148.60 by 0238 GMT. The benchmark fell 2 points on Tuesday.

Banks were the dominant gainers on the benchmark on Wednesday, with the financial index jumping 1.7 percent to a four-week high.

Financial stocks have rallied of late on weakness in the Australian dollar which has been sinking in response to intensifying trade tensions between the United States and China.

James McGlew, executive director for corporate stockbroking at Perth-based Argonaut, said that the further drop in the Aussie dollar had attracted international investors to Australian banks and their solid dividend yields.

No.2 lender Westpac Banking Corp firmed 2.4 percent, to its highest since May 23, and was the biggest boost to the benchmark.

Earlier in the day, Westpac said that wealth management arm BT Financial Advice would stop receiving so-called grandfathered payments from its financial products.

Other heavyweights in the sector, Commonwealth Bank of Australia strengthened 1.9 percent to a near five-week high, while Australia and New Zealand Banking Group Ltd rose about 2.5 percent, its biggest intraday percentage gain in nearly two months.

Health care stocks, which generate a substantial portion of their income from the United States, also cheered the weaker Aussie dollar.

Pharmaceutical firm CSL Ltd jumped 0.9 percent to a record high, while bionic ear maker Cochlear Ltd firmed 1.8 percent.

Meanwhile, oil stocks also traded higher, helped by a rise in crude oil prices.

Oil prices rose in early Asian trading on Wednesday, supported by a drop in U.S. commercial crude inventories.

Santos Ltd rose 2.5 percent to a more than four-week high, while Woodside Petroleum Ltd ticked up 0.8 percent to near its highest in three years.

But Telstra Corporation Ltd slumped about 5 percent to a its lowest since August 2011 and was the biggest drag on the benchmark.

Australia’s largest telecom firm said on Wednesday it would cut a quarter of its workforce and flagged asset sales as competition and new technology crush its mainstay fixed-line businesses and force a strategic reset.

New Zealand’s benchmark S&P/NZX 50 index rose 0.5 percent or 41.30 points to 8,904.54 ahead of GDP data out on Thursday.

New Zealand’s economic growth is expected to have slowed further in the first quarter, a Reuters poll found, falling short of central bank expectations and underscoring the case for keeping interest rates on hold for a considerable time.

Consumer staples led the gains on Wednesday, having lost nearly 2.5 percent in the past two days.

A2 Milk Company Ltd rose 1.4 percent and dairy giant Fonterra rose 1 percent. (Reporting by Aditya Soni in Bengaluru; Additional reporting by Nikhil Kurian Nainan Editing by Eric Meijer)

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