By Shashwat Pradhan
Sept 22 (Reuters) - Australian shares climbed for a third straight session on Thursday, driven by mining and banking stocks, after the U.S. Federal Reserve left interest rates unchanged.
The Fed kept its target rate for overnight lending between banks in a range of 0.25 percent to 0.50 percent, where it has been since it hiked rates last December for the first time in nearly a decade. a statement following a two-day policy meeting, the Fed said it could tighten monetary policy by year-end if the labour market had improved further. MKTS/GLOB
The S&P/ASX 200 index .AXJO rose 0.8 pct, or 41.84 points to 5,381.4 by 0217 GMT.
On Wednesday, Bank of Japan decided to adopt a target for long-term interest rates in an overhaul of its massive stimulus programme. combination of what the Bank of Japan and Fed decided to do justifies the removal of some short-term risk premium from equity markets around the world including Australia, and that is why we are seeing a rally today", said Ric Spooner, chief market analyst for CMC Markets.
Reserve Bank of Australia governor Philip Lowe gave an optimistic assessment of the economy in his first public appearance, with growth underpinned by two rate cuts this year, a lower currency and stable commodity prices. and financial stocks lifted the benchmark index, accounting for more than half of the gains.
Global miner BHP Billiton (LON:BLT) Ltd BHP.AX rose as much as 3.2 percent to hit a near one-month high while Rio Tinto (LON:RIO) Ltd RIO.AX jumped 3 percent.
Gold stocks .AXGD jumped 6.1 percent after gold prices rose to 1-1/2-week highs on Wednesday Newcrest Mining Ltd NCM.AX rose as much as 7.3 percent to record its biggest intra-day percentage gain since June.
Australia's "Big Four" banks were up by between 0.4 percent and 0.9 percent.
The energy index .AXEJ advanced as oil prices extended gains after a surprise third consecutive weekly U.S. crude inventory draw tightened the market. O/R Oil major Woodside Petroleum WPL.AX gained 2 percent while Origin Energy ORG.AX rose 3 percent.
New Zealand's benchmark S&P/NZX 50 index .NZ50 recovered to rise 0.6 percent, or 42.48 points to 7,323.65.
New Zealand's central bank kept its benchmark interest rate at 2.0 percent, but the high New Zealand dollar and lukewarm inflation may soon spur it to cut. giant Fonterra Co-operative Group Ltd FCG.NZ nudged 0.2 percent higher after reporting an increase in its full year net profit despite challenges in global dairy markets. Ltd TWR.NZ was the biggest percentage gainer on the benchmark, rising as much as 4.7 percent to record its biggest intra-day percentage gain since May.
For more individual stocks activity click on STXBZ