* Banks stocks at bargain prices after 20 pct dip
* Investors cautiously optimistic about U.S. recovery (Adds analysis, quotes, stocks on the move)
By Byron Kaye and Cecile Lefort
SYDNEY/WELLINGTON, Sept 28 (Reuters) - Australian shares rose on Monday as investors swooped on bank stocks made cheap by months of declines, while a lower oil price stoked hopes that transport companies will benefit from reduced costs.
Encouraging U.S. economic figures released late last week also revived hopes of a rate hike in 2015, driving up the U.S. dollar and making Australian companies even cheaper. ID:nL3N11Y00H
By 0235, the S&P/ASX 200 index .AXJO was up 0.8 percent or 40.4 points at 5,082.5. The benchmark is still down more than 2 percent this month and down 7 percent so far this quarter.
"It's a lot of reacting to oversold banks," said Heuristic Investment Systems founder Damien Hennessy.
"The market's still down a fair way for the quarter so it's probably a little bit of bargain buying around these levels. Yield is still a key factor."
Banks led the gains, having declined nearly 20 percent since March as lenders sell assets and hold large share issues to meet tough new rules forcing them to keep more cash on hand.
Commonwealth Bank of Australia CBA.AX was up 1.8 percent, while National Australia Bank NAB.AX , Westpac Banking Corp WBC.AX and Australia and New Zealand Banking Group ANZ.AX were up about 1.5 percent.
Logistics and transport firms also fared well. Brambles BXB.AX was up 2.3 percent and Qantas Airways QAN.AX added 2 percent.
Energy retailer AGL AGL.AX firmed 3.7 percent as investors warmed to a series of statements detailing its plans to overhaul the heavily-polluting business and sell only renewable energy.
Internet provider M2 MTU.AX jumped 13 percent, the biggest gainer in the benchmark index, after saying it plans to sell its shares to smaller rival Vocus Communications VOC.AX , down 6 percent.
The big miners lost ground as the prices of key commodities such as iron ore remained near multi-year lows on concerns about slowing demand from top buyer China.
BHP Billiton (LONDON:BLT) BHP.AX was off by 1.1 percent and rival Rio Tinto (LONDON:RIO) RIO.AX dipped 1.6 percent. Gold major Newcrest NCM.AX skidded 2.2 percent as expectations of a U.S. rate hike sent investors switching from gold into U.S. dollars.
New Zealand's benchmark NZX 50 index .NZ50 edged up 0.1 or 7.6 points to 5,694.96 following a sluggish lead from Wall Street.
Clothing retailer Kathmandu KMD.NZ rose about 2 percent while New Zealand securities exchange NZX NZX.NZ also jumped 2 percent.
The infrastructure sector came under pressure with utility Meridian Energy MEL.NZ off 5 percent to hit a two-week trough, while telecom company Spark SPK.NZ was down 0.7 percent.
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