May 26 (Reuters) - Australian shares on Tuesday climbed to their highest in more than two months, as hopes of economic recovery buoyed sentiment with the country slowly moving towards normal activity, while Sino-U.S. tensions over Hong Kong continued to weigh.
The S&P/ASX 200 index .AXJO was up 0.89% at 5,665.8, as of 0037 GMT. The bourse rose as much as 1% to hit its highest since March 12. The benchmark closed 2.2% firmer on Monday.
Australian Prime Minister Scott Morrison is expected to say on Tuesday that the country's economy must not become reliant on government stimulus, according to extracts of a speech sent to Reuters. China warned on Monday that it will take counter-measures if the United States insists on undermining its interests regarding Hong Kong, fuelling fears of a continued standoff between the world's largest economies. stocks .AXEJ boosted the benchmark, rising as much as 2.2% to its highest level since March 11 on the back of firmer oil prices.
Brent crude LCOc1 futures rose 0.48% to $35.70 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 gained 2.05% to $33.93 per barrel. O/R
Shares of Woodside Petroleum Ltd WPL.AX rose 2.52%, while Beach Energy Ltd BPT.AX climbed 2.47%.
Financial stocks .AXFJ rose 0.89% with the 'Big Four' lenders gaining in a range of 0.5% to 1.2%.
Advancing volumes outnumbered declining ones by a 2.6:1 ratio on the Australian exchange.
In New Zealand, the benchmark S&P/NZX 50 index .NZ50 rose 0.48% to 10,828.
The top percentage gainers in the benchmark .NZ50 were SKY Network Television Ltd SKT.NZ , up 11.11%, followed by Kathmandu Holdings Ltd KMD.NZ , gaining 5.05%.
Shares of Air New Zealand AIR.NZ surged 2% after the carrier said it slashed costs to the extent it had not yet needed to draw down on a government loan.