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Aug 28 (Reuters) - Australian shares ended higher on Wednesday, with investors favouring mining stocks over their banking counterparts as a deepening U.S. debt yield curve inversion raised concerns over margin pressure for lenders.
The S&P/ASX 200 index .AXJO finished 0.5%, or 29.4 points, higher at 6,500.6.
Australia's equity markets are dominated by banking and resource stocks, and with the former losing favour with cautious investors, miners .AXMM and energy units .AXEJ tacked on 1.8% and 0.9%, respectively.
The world's biggest miner BHP Group BHP.AX closed 1.3% higher, while oil and gas producer Woodside Petroleum WPL.AX gained 1.6%.
"With the yields collapsing, we have to think the margins for the banks are getting tougher and tougher," said Mathan Somasundaram, a Blue Ocean Equities market portfolio strategist.
The U.S. Treasury yield curve inversion deepened on Tuesday to levels not seen since 2007, pointing to pressure for the net interest margins for banks, as they pay short-term rates on deposits and take in long-term rates on loans.
The "big four" banks lost between 0.3% and 1.3%, while troubled wealth manager AMP Ltd AMP.AX closed 0.9% lower after touching a record low, as Ratings agency S&P Global on Tuesday downgraded its credit rating. fears about trade and the global economy fed safe-haven appetite, boosting gold stocks .AXGD to close 2.5% higher. Gold miner Newcrest Mining Ltd NCM.AX added 2.9% for the session. MKTS/GLOB
Technology stocks .AXIJ such as Appen Ltd APX.AX and Afterpay Touch APT.AX surged 10.8% and 9.3%, respectively, to lead gainers on the benchmark. Afterpay closed at its best level in well over 3 months after posting solid annual growth in the United States and Britain. Australia's No. 2 airline Virgin Australia VAH.AX closed at its weakest since 2009 after swinging to an annual underlying loss, and posting plans to cut 750 jobs, merge business divisions and conduct a sweeping review of its operations. Zealand's benchmark index .NZ50 ended 1.1% higher, or 113.01 points, at 10,626.17. Fisher and Paykel Healthcare Corp FPH.NZ was the top gainer, up 6.1% after upgrading its full-year earnings guidance.