* The Australian dollar weakens 1.5% overnight
* Healthcare sector top gainer on the benchmark, up 1.9%
* CSL Ltd closes at three-week peak (Updates to close)
By Harish Sridharan
March 24 (Reuters) - Australian shares reclaimed lost ground to close higher on Wednesday, buoyed by healthcare stocks, as a weaker local currency boosted the export-reliant sector.
The S&P/ASX 200 index .AXJO was up 0.5% at 6,778.8 points at the close of trade, after falling as much as 0.15% earlier in the session.
The Australian dollar weakened 1.5% overnight, as investors abandoned bets on higher interest rates domestically, while tighter coronavirus lockdowns in Europe pushed bond yields down globally. AUD/
"I think the weaker Australian dollar is probably helping our exports and we are seeing a bit of rotation into the safety stocks," said Damian Rooney, director of equity sales at Perth-based Argonaut.
The safe-haven U.S. dollar strengthened to a four-month high on Wednesday as concerns over a third COVID-19 wave in Europe and potential U.S. tax hikes sapped risk appetite and weakened other currencies. .N USD/
In Australia, the healthcare sector .AXHJ , which is heavily exposed to the U.S. market, ended 1.9% higher as CSL Ltd CSL.AX rose 1.9% to close at a three-week high, while hearing implant maker Cochlear Ltd COH.AX added 3.7%.
Technology stocks .AXIJ advanced 0.4%, with buy-now-pay-later company Xero XRO.AX hitting a three-week high after acquiring Swedish e-invoicing firm Tickstar. financial stocks .AXFJ climbed 0.4%, with Commonwealth Bank of Australia CBA.AX gaining 1.9% to mark its best session in more than three weeks.
Bucking the upward trend, energy stocks .AXEJ finished 0.9% down, with Santos Ltd STO.AX and Woodside Petroleum WPL.AX falling 1.5% and 1.1%, respectively.
Santos said it expects to make a final investment decision on its Barossa project in the coming weeks after the oil and gas producer postponed the call last year. Zealand's benchmark S&P/NZX 50 index .NZ50 closed 0.3% higher at 12,358.88 points. Electricity retailer Mercury NZ Ltd MCY.NZ was the top gainer on the bourse.
Westpac Banking Corp WBC.AX said that it was in the early stages of assessing a possible demerger of its New Zealand business.