* Most gains predominantly short covering - analyst
* Heavyweight bank stocks up more than 1%
* Restaurant Brands top gainer on NZX after strong outlook
By Devika Syamnath
Oct 16 (Reuters) - Australian shares rose on Wednesday, boosted by a solid start to the U.S. earnings season and reports that Britain still has a chance of avoiding a messy exit from the European Union.
The S&P/ASX 200 index .AXJO notched up 0.9%, or 55.6 points, to 6,707.6 by 0123 GMT, poised for a fifth day of gains, after having added 1.6% in the last four sessions combined.
A string of strong third-quarter earnings reports helped dispel some concerns over a global economic downturn and pushed Wall Street up 1%, while news of a possible breakthrough in Brexit negotiations also aided investor confidence. MKTS/GLOB .N
"A lot of these moves are predominantly short covering as the market was worried about this month," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.
Markets have long been gripped by worries of escalation in the bruising U.S.-China trade war, but recent news of the "Phase 1" trade deal between Washington and Beijing had helped dial back risk ante even though nothing was agreed on paper.
"It will be short lived in my opinion...it's a suckers rally," said Brad Smoling, managing director at Smoling Stockbroking.
Australian bank stocks .AXFJ , the heaviest components on the benchmark, climbed as much as 1.3% and were set for their best session since end-August.
The "Big Four" banks advanced between 1% and 1.5%.
Energy firms .AXEJ gained more than 1%, lifted by improving oil prices, with the country's biggest oil and gas producer Woodside Petroleum Ltd WPL.AX tacking on as much as 1%. O/R
Industrial engineering company WorleyParsons WOR.AX moved up as much as 3.7% after it informed the foreign investments regulator of "creeping acquisitions" by its biggest shareholder, Dubai-based Dar Group. third quarter output from Brazilian miner Vale SA VALE3.SA pressured China iron ore prices and sent the domestic mining sub-index .AXMM down as much as 0.4%. IRONORE/
The world's biggest miner, BHP Group Ltd BHP.AX , gave up 0.3%. Smaller peer Rio Tinto (LON:RIO) RIO.AX lost as much as 0.4% despite reporting a 5% rise in third-quarter iron ore shipments, helped by higher demand from Chinese steelmakers. miners .AXGD fell as much as 2.8% to their weakest in 15 weeks, set for a fifth session of losses on diminished risk aversion.
Newcrest Mining NCM.AX declined as much as 2.5% to a more than two-month low.
The New Zealand benchmark .NZ50 rose 0.8% to 11,133.55, marking its fourth straight session of gains. Restaurant Brands New Zealand RBD.NZ was the top gainer after upbeat guidance. Zealand's inflation accelerated at a slightly faster-than-expected pace in the third quarter, but it did little to change the view that interest rates would be cut further this year to bolster the economy.