By Colin Packham and Charlotte Greenfield
SYDNEY/WELLINGTON, May 3 (Reuters) - Australian shares rose more than 0.5 percent on Tuesday, recouping all the losses in the previous session, despite the country's fourth largest bank posting its biggest decline in half-year cash profit since 2008.
The S&P/ASX 200 index .AXJO rose 0.75 percent, or 39.3 points to 5,282.3 by 0319 GMT. The benchmark fell 0.18 percent on Tuesday.
Financials led the index higher, rising 0.75 percent as market sentiment was buoyed despite Australia and New Zealand Banking Group ANZ.AX posting its biggest half-yearly decline in cash profit since 2008 and slashed dividends for the first time in seven years on rising corporate defaults triggered by a mining downturn. lot of investors seem to be indicating that this might be the low point for ANZ and that had a positive impact on the index and the view that the worse maybe over for financials," said Angus Nicholson, market analyst, IG Markets.
ANZ rose more than more than 4 percent, while Commonwealth Bank of Australia Ltd CBA.AX and National Australia Bank Ltd NAB.AX both rose more than 1.5 percent. Westpac Banking Corporation WBCWB.UL - the other member of Australia's Big Four banks rose nearly 1 percent.
Australia's largest miners, Rio Tinto (LON:RIO) Ltd RIO.AX and BHP Billiton (LON:BLT) Ltd BHP.AX both fell more than 2 percent as Chinese iron prices retreated.
New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.25 percent or 15.83 points to 6,807.65 on Tuesday.
New Zealand's biggest poultry processor Tegel Group Holdings Ltd TGH.NZ jumped as much as 10 percent after its debut on the New Zealand stock exchange on Tuesday.
Air New Zealand AIR.NZ rose 2.78 percent as the airline held its investor day presentation and said the fuel price outlook and record tourism to New Zealand continued to be favourable.
Sky TV SKT.NZ lost 1.85 percent and telecommunications operator Spark SPK.NZ fell 1.76 percent.