SYDNEY/WELLINGTON, Dec 16 (Reuters) - Australian shares bounced off a 2-1/2 year low on Wednesday following a positive lead from Wall Street, with investors buying back many of the beaten-down sectors - including banks and miners.
The S&P/ASX 200 index .AXJO rose 93.85 points, or 1.91 percent, to 5,003.40 by 1246 GMT, recovering from 4,909.60 - a trough not seen since July 2013. If sustained, the index would break a six-session losing streak.
Yet, analysts suspect nerves ahead of a likely hike in U.S. interest rates and persistent weakness in commodity prices would keep investors on edge.
"We wouldn't be surprised if we see our market get sold off towards the close as investors look to close their positions ahead of the U.S. interest rate decision," said Anthony D'Paul, chief executive of Australian Stock Report.
The Federal Reserve's long-awaited decision will be announced at 1900 GMT. A rate hike is widely expected, and investors are more intent on learning the likely pace of tightening after the initial move. urn:newsml:reuters.com:*:nL1N1441IT
All the big four banks rose by more than 2.0 percent while global miner BHP Billiton (L:BLT) BHP.AX jumped 4.6 percent, pulling away from a 10-1/2 year low set a day ago.
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New Zealand's benchmark NZX 50 index .NZ50 rose 0.62 percent, or 37.21 points, to 6,077.76.
Gains were led by accounting software company Xero XRO.NZ , which rose 4.2 percent as it recovered from four consecutive sessions of losses.
Telecommunications company Spark NZ SPK.NZ advanced 2.11 percent, reversing a 2.5 percent drop in the previous day.
Bucking the trend, Chorus CNU.NZ shed 2.08 percent as investors took profits after the stock soared 23.87 percent in the previous session on the news that New Zealand's competition regulator had decided the company could charge retail telecommunication companies more to access its infrastructure.
Shares in Fonterra's FCG.NZ fund, which provides investor exposure to the farmer-owned dairy exporter, edged up 0.69 percent after a fortnightly auction showed global dairy prices continued to stabilise, but rose less than the market expected. urn:newsml:reuters.com:*:nL3N14456Z