By Justin George Varghese
Oct 18 (Reuters) - Australian shares rose on Tuesday, backed by financials and mining shares which were buoyed by higher commodity prices.
The S&P/ASX 200 index .AXJO was up 0.57 percent after four days of losses, rising 25.22 points to 5,413.9 as of 0200 GMT.
The financials benchmark .AXFJ accounted for more than half the gains on the benchmark, led by Challenger Ltd CGF.AX which rose to a 16-year high after announcing an increase in its assets and funds under management. 'Big Four' Australian banks rose as much as 0.5 percent to 0.7 percent ahead of reporting its results next week.
"We're expecting bank earnings to be low growth. The key thing to watch will be the impairment trends and after that bottom line EPS, and DPS," said Will Keenan, general manager of Direct Equities Research at Lonsec.
Higher gold prices fueled gains for miners of the precious metal, with Newcrest Mining Ltd NCM.AX , Evolution Mining Ltd EVN.AX , Regis Resources Ltd RRL.AX and St Barbara resources Ltd SBM.AX up 1.6 to 4 percent. GOL/
Gains in iron ore futures led global miner BHP Billiton (LON:BLT) BHP.AX and rival Rio Tinto (LON:RIO) RIO.AX marginally higher, with Fortescue Metals Group FMG.AX up as much as 1.6 percent. Iron ore futures on the Dalian Commodity Exchange DCIOcv1 had risen 2.3 percent to close at 442 yuan. IRONORE/
Sentiment was also impacted by possible merger talks between Australian gambling companies Tatts Group Limited TTS.AX and Tabcorp Holdings Ltd TAH.AX , which requested trading halts on Tuesday to pursue talks to create a A$9.34 billion ($7.1 billion) industry giant.
"It looks like there's going to be a takeover or a merger between Tabcorp and Tatts and that has probably created a positive start to the markets," Keenan added.
Energy stocks .AXEJ shed as much as 0.7 percent to touch a near two-week low, led by oil major Caltex Australia Ltd CTX.AX which dropped as much as 2.7 percent after it confirmed its offer to proposal to buy Woolworths Ltd's WOW.AX petrol station chain.
Analysts expect the deal to be valued at more than A$1.5 billion ($1.1 billion). Zealand's benchmark S&P/NZX 50 index .NZ50 slid as much as 1.3 percent or 93.59 points to 6,972.78, its lowest since July 6.
Declining issues outpaced advancers on the New Zealand exchange by a 4.25-to-1 ratio.
Utilities and healthcare accounted for nearly half of the losses on the benchmark index.
Genesis Energy Ltd GNE.NZ was the top percentage loser, declining as much as 2.9 percent.
Meridian Energy Ltd MEL.NZ and Mercury NZ Ltd MCY.NZ dragged utilities lower, falling 2.9 percent and 2 percent, respectively.
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