(Fixes headline typo)
* Aussie shares at highest since Jan 2008
* Financials cheer weaker Aussie dollar
* Telstra slumps under pressure
* NZ rises on consumer staples
By Aditya Soni
June 20 (Reuters) - Australian shares climbed to their highest in more than 10 years on Wednesday, led by a rally in banks, but Telstra's fall after it flagged major job cuts and asset sales in a "strategic reset" capped the gains.
The S&P/ASX 200 index .AXJO rose 0.8 percent or 46.5 points to 6,148.60 by 0238 GMT. The benchmark fell 2 points on Tuesday.
Banks were the dominant gainers on the benchmark on Wednesday, with the financial index .AXFJ jumping 1.7 percent to a four-week high.
Financial stocks have rallied of late on weakness in the Australian dollar which has been sinking in response to intensifying trade tensions between the United States and China. AUD/
James McGlew, executive director for corporate stockbroking at Perth-based Argonaut, said that the further drop in the Aussie dollar had attracted international investors to Australian banks and their solid dividend yields.
No.2 lender Westpac Banking Corp WBC.AX firmed 2.4 percent, to its highest since May 23, and was the biggest boost to the benchmark.
Earlier in the day, Westpac said that wealth management arm BT Financial Advice would stop receiving so-called grandfathered payments from its financial products. heavyweights in the sector, Commonwealth Bank of Australia CBA.AX strengthened 1.9 percent to a near five-week high, while Australia and New Zealand Banking Group Ltd ANZ.AX rose about 2.5 percent, its biggest intraday percentage gain in nearly two months.
Health care stocks, which generate a substantial portion of their income from the United States, also cheered the weaker Aussie dollar.
Pharmaceutical firm CSL Ltd CSL.AX jumped 0.9 percent to a record high, while bionic ear maker Cochlear Ltd COH.AX firmed 1.8 percent.
Meanwhile, oil stocks also traded higher, helped by a rise in crude oil prices. O/R
Oil prices rose in early Asian trading on Wednesday, supported by a drop in U.S. commercial crude inventories.
Santos Ltd STO.AX rose 2.5 percent to a more than four-week high, while Woodside Petroleum Ltd WPL.AX ticked up 0.8 percent to near its highest in three years.
But Telstra Corporation Ltd TLS.AX slumped about 5 percent to a its lowest since August 2011 and was the biggest drag on the benchmark.
Australia's largest telecom firm said on Wednesday it would cut a quarter of its workforce and flagged asset sales as competition and new technology crush its mainstay fixed-line businesses and force a strategic reset. Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.5 percent or 41.30 points to 8,904.54 ahead of GDP data out on Thursday.
New Zealand's economic growth is expected to have slowed further in the first quarter, a Reuters poll found, falling short of central bank expectations and underscoring the case for keeping interest rates on hold for a considerable time. staples led the gains on Wednesday, having lost nearly 2.5 percent in the past two days.
A2 Milk Company Ltd ATM.NZ rose 1.4 percent and dairy giant Fonterra FSF.NZ rose 1 percent.