* Aussie shares rise tracking broader Asia
* Materials and financials gain most
* NZ follows track to edge higher (Updates to close)
By Rashmi Ashok
Oct 30 (Reuters) - Australia shares reversed course to end higher on Tuesday as Chinese equities rose on fresh attempts by Beijing to stabilize its markets, though underlying sentiment remained fragile in an environment of heightened volatility in global financial markets.
Broad-based gains pushed the S&P/ASX 200 index .AXJO 1.3 percent, or 76.900 points, higher to 5,805.100 at close. That extended a 1.1 percent rise for the benchmark on Monday.
Earlier, China's securities regulator said it would encourage share buybacks, mergers and acquisitions by listed firms, and would enhance market liquidity, in the latest attempt to put a floor under the country's skidding equity markets.
Moreover, Bloomberg reported that U.S President Donald Trump had predicted a "great" deal with China in an interview on Fox News' Laura Ingraham Show. That came after Wall Street was spooked overnight by a separate Bloomberg report, which quoted Trump as saying Washington is preparing to announce tariffs on all remaining Chinese imports. latest Fox News report, however, appeared to take precedence for the Australian dollar AUD= - a proxy for China-related trades and a gauge of broad risk appetite - which added 0.5 percent by 0619 GMT.
“The Chinese markets seem to be reversing course from steep losses recently. That's definitely welcome news and there's been a spill over from the Chinese stocks performance, especially in metals.” said James McGlew, executive director of corporate stockbroking at Argonaut.
The metals and mining index .AXMM gained 1.6 percent, with global miner BHP BHP.AX rising 1.8 percent, while Rio Tinto (LON:RIO) Ltd RIO.AX closed 2.4 percent higher.
China is Australia's largest trading partner and a big buyer of its key resources exports.
The financial stocks .AXFJ also underpinned the gains, closing 1.7 percent higher.
McGlew said financials were also benfitting from bargain hunting as they were "too attractive to ignore."
National Australia Bank Ltd NAB.AX rose 0.6 percent and Commonwealth Bank of Australia CBA.AX gained 2.3 percent at close.
Banks also seemed to have caught a break as the Reserve Bank of Australia's Assistant Governor Michelle Bullock said that the transition to higher capital levels was coming to an end for major banks. said the move would allow banks to enjoy more flexibility with their balance sheet which could improve their growth profile.
New Zealand's benchmark S&P/NZX 50 index .NZ50 added 0.4 percent or 32.84 points to finish the session at 8,648.38.
Financial market operator NZX Limited NZX.NZ was the biggest percentage gainer, rising 2.9 percent.