* Shares up 1.7 percent
* Broad-based gains led by banks
* Greece remains a worry
* 176 shares up, 17 down and 6 unchanged (Adds analysis, quotes, stocks on the move)
By Pauline Askin and Naomi Tajitsu
SYDNEY/WELLINGTON, July 7 (Reuters) - Australian shares rebounded 1.7 percent on Tuesday on broad-based gains following two-losing sessions, as investors sought to buy stocks cheapened by the debt crisis in Greece.
The S&P/ASX 200 index .AXJO rose 99.9 points to 5,574 by 0211 GMT, it's biggest daily percentage gain in 3-1/2 months. The benchmark fell 1.1 percent for its second day of losses on Monday.
"Volatility is without doubt the major theme in equity markets at the moment," James McGlew, Executive Director of Corporate Stockbroking, Argonaut said.
"Inspite of very weak commodity prices ... the whole game today has been the pursuit of yields and safety, in particular the banks," he added.
The index has fallen every month since March, largely dragged lower by banks and resources shares. The Greek debt sage and a slowdown in China, Australia's No 1 trading partner, has weighed on the market.
Global markets have been volatile in recent weeks as Greece's standoff with its creditors raised the risk of the debt-laden nation making a disorderly exit from the currency union. ID:nL3N0ZN02R ID:nL8N0ZM0JD
Banks, which are coveted by investors for their attractive dividends, led the gains. National Australia Bank NAB.AX rose 2.3 percent, Westpac Bank WBC.AX gained 2.9 percent and Australia and New Zealand Banking Group ANZ.AX jumped 2.1 percent.
A sharp drop in oil prices overnight hit energy stocks, with Origin Energy ORG.AX and Santos STO.AX down 1 percent and 1.5 percent respectively.
Telecom stocks rallied with Telstra TLS.AX up 2.3 percent and TPG Telecom TPM.AX up 3 percent.
For more individual stocks activity click on STXBZ
New Zealand's benchmark NZX 50 index .NZ50 added 0.4 percent or 25.5 points to 5,802,1, supported by the healthcare sector.
Summerset SUM.NZ jumped 3.7 percent to NZ$3.67, approaching a lifetime high of NZ$3.75 after the retirement village operator issued upbeat full year earnings guidance. ID:nWNBS00ZDP
Optimism about the country's growing elderly care sector lifted other healthcare shares, with retirement village operator Ryman Healthcare RYM.NZ rising 1.27 percent.
Fletcher Building FBU.NZ rose 0.9 percent to NZ$7.97, after a slide to a three-year low of NZ$7.90 on Monday prompted dip buying in shares of one of the country's largest companies by market capitalisation.
(Editing by Shri Navaratnam)