By Aparajita Saxena
May 22 (Reuters) - Australia shares rose on Monday and looked set to break a three-session losing streak, as gains in financials, metals and energy companies bolstered the index.
The S&P/ASX 200 index .AXJO rose 0.81 percent, or 46.59 points, to 5,774.7 by 0231 GMT.
After falling for four of five sessions last week, the financial index .AXFJ rose 0.7 percent. Three of the 'Big Four' rose, though Australia and New Zealand Banking ANZ.AX slipped 0.5 percent.
"Banks are rebounding today after being sold off quite heavily this month. Melbourne banks ANZ and NAB are lagging, compared with Sydney banks at the moment," said Bill Keenan, general manager of direct equities research at broker Lonsec.
"ANZ has been underperforming since after the results season, and is generally lower this month."
Westpac Banking Corp WBC.AX , the country's second biggest lender, said on Monday that a new bank levy announced by the government in its budget would result in additional costs of A$65 million ($48.36 million) in the second half of the financial year ending September. big banks said last week they would pass on the financial hit from the new tax to their customers and shareholders.
Morgan Stanley (NYSE:MS) estimated the levy would reduce annual earnings of the top banks including Macquarie MQG.AX by an average of 4.5 percent if customers and stakeholders did not absorb costs. in financials were mostly spearheaded by insurers - QBE Insurance QBE.AX rose 1.44 percent, while Suncorp Group SUN.AX jumped 0.8 percent.
"(The Australian market) is also seeing strength from energy and resources shares," Keenan added.
Oil prices rose to their highest in a month on Friday on growing expectations that OPEC and other producing countries would agree to extend output cuts. O/R
Prices continued to rise in Asian trading on Monday, boosting the energy share index .AXEJ in Australia by 2.2 percent.
Woodside Petroleum WPL.AX , Oil Search OSH.AX rose nearly 1.5 percent, while Origin Energy ORG.AX rose 4.61 percent.
Iron miners Rio Tinto (LON:RIO) RIO.AX , BHP Billiton (LON:BLT) BHP.AX and Fortescue Metals FMG.AX rose 2 percent to 4.7 percent, after iron ore traded on the Dalian Commodity Exchange DCIOcv1 rose over 3 pct on Friday. IRONORE/
Rio Tinto shares flirted with three month highs, and were headed for their fifth session of gains.
Nickel miner Western Areas Ltd WSA.AX was the biggest gainer on the benchmark index, surging 7.6 percent.
It was tracking 3-month nickel prices on the LME CMNI3 , which rose half a percent, and Shanghai nickel SNIcv1 , which rallied 3 percent on Monday. MET/L
New Zealand's benchmark S&P/NZX 50 index .NZ50 dipped in and out of positive territory but was little changed. By 0228 GMT, it was up 0.03 percent or 2.09 points to 7,394.2.
Loss in utilities were offset by gains in telecom shares - Spark New Zealand SPK.NZ rose as much as 1.7 percent, while Chorus Ltd CNU.NZ gained 2.53 percent.
For more individual stocks activity click on STXBZ ($1 = 1.3441 Australian dollars)