By Hanna Paul
Jan 5 (Reuters) - Australian shares traded slightly higher on Thursday, lifted by the jump in oil prices and reflecting gains on Wall Street, as policymakers hinted at the possibility of faster interest-rate hikes after Donald Trump becomes takes office as President.
The S&P/ASX 200 index .AXJO edged up 0.33 percent or 19.191 points to 5,755 by 1254 GMT, on track for its third straight session of gains, after hitting its highest since June 2015. The benchmark was flat on Wednesday.
"Today's movement is more on the back of oil price shifting up overnightthe draw is coming from the energy and materials sector rather than financials" said Evan Lucas, Market Strategist from IG markets.
Oil prices rose almost 2 percent on expectations of a drop in U.S. crude inventories and growing confidence that parties to the OPEC output reduction deal will implement the agreed cuts from this week. O/R
Oil Search OSH.AX and Origin Energy ORG.AX gained 0.5 percent and 0.9 percent respectively.
Sentiment was also boosted by gains on Wall Street following minutes from the Fed's December meeting reflecting a view that increased economic growth under the incoming Trump administration could demand quicker interest-rate increases to ward off inflation. "Big Four" banks extended gains to a third consecutive session. Commonwealth Bank of Australia CBA.AX rose 0.6 percent to hit a one-year high, Australia and New Zealand Banking Corp ANZ.AX rose to its highest in 17 months while National Bank of Australia NAB.AX touched a 14-month high.
The All Ordinaries Gold Index .AXGD hit a one-month high as gold climbed to its highest in nearly four weeks after the dollar stepped back from a 14-year peak and demand from China and India increased. GOL/
Newcrest Mining NCM.AX , Australia's biggest producer of gold led gains in the benchmark, advancing as much as 2.3 percent, to strike its highest in a month.
Mining heavyweights Rio Tinto (LON:RIO) Ltd RIO.AX and South32 Ltd S32.AX gained 0.7 percent and 0.9 percent respectively.
New Zealand's benchmark S&P/NZX 50 index .NZ50 edged lower 0.2 percent or 13.790 points, to 6,960, after hitting its highest in 2 months in early trade.
Materials fell with Fletcher Building FBU.NZ down 1.5 percent. Industrials was also down with Auckland International Airport AIA.NZ falling 1.4 percent.