By Aparajita Saxena
May 25 (Reuters) - Australian shares recouped early losses and edged higher on Thursday as mining and oil stocks rose on the back of stronger commodity prices.
The S&P/ASX 200 index .AXJO was up 0.17 percent, or 9.625 points, at 5,778.6 by 0301 GMT.
The metals index .AXMM rose 0.9 percent, snapping two sessions of losses.
Index heavyweight BHP Billiton (LON:BLT) BHP.AX was the biggest gainer on the S&P/ASX 200, advancing as much as 1.1 percent, following higher three-month copper prices on the LME CMCU3 .
Adding to BHP's gains were oil prices, which rose in Asian trading on Thursday, ahead of the OPEC meeting which is largely seen centered on discussions relating to a production cut. O/R
Oil majors Woodside Petroleum WPL.AX and Origin Energy ORG.AX rose around 1 percent each.
The energy index .AXEJ jumped as much as 1.1 percent, hitting its highest in 21 months.
Gold stocks .AXGD also added to the upward momentum, tracking steady spot gold prices XAU= . Mining PRU.AX rose 3.5 percent, while OceanaGold OGC.AX rose 2.4 percent.
Nickel miners Western Areas WSA.AX and Independence Group NL IGO.AX jumped as nickel prices climbed.
Weighing on the index, however, were financials stocks.
The financial index .AXFJ fell as much as 1.1 percent to its lowest in more than five months. Westpac WBC.AX and National Australia Bank NAB.AX fell as much as around 1.5 percent.
Australian bank shares have been whipsawing ever since the government announced new tax levies on banks, which could add up to a total of around A$1 billion in additional annual costs for the 'Big Four' banks. a debate aboiut what the levy means for banks' strategy going forward - do they pass it on to shareholders by decreasing dividends, do they increase loan rates, do they cut staff...those uncertainties are weighing on the sector, and dragging the markets lower," said Tony Farnham, economist at Patersons Securities.
Concerted efforts by Australian banking regulators to cool the country's red property market have also pressured banking stocks.
"Banks are stuck in a band with their main money maker, i.e. the housing bubble, running into limits...time to take profit and come back later when relative value returns to the sector," BlueOcean Equities said in a note.
New Zealand's benchmark S&P/NZX 50 index .NZ50 was little changed at 7,422.16, up 0.005 percent or 0.38 points.
Fisher & Paykel Healthcare Corp Ltd FPH.NZ was the top performer on the index, followed by telecom services provider, Spark New Zealand SPK.NZ .
Milk supplier A2 Milk Company ATM.NZ was the biggest loser, down 0.6 percent.
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