(Updates to close)
* Aussie central bank holds rates at record low
* Buy-now-pay-later firm Zip hits over 7-month high
* NZ benchmark ends 1.4% firmer
By Shashwat Awasthi
June 2 (Reuters) - Australian shares closed higher on Tuesday after the country's central bank reiterated that the impact from the coronavirus crisis could be less damaging than initially feared, repeatedly stoking hopes of a speedy economic recovery.
The S&P/ASX 200 .AXJO closed 0.3% firmer at 5,835.10, though lingering worries over U.S.-China relations kept a lid on gains.
The benchmark shot up more than 30% since sinking to a more than seven-year low in March and is on a five-week winning run, with the country able to contain the outbreak and swiftly position itself for an economic rebound.
The Reserve Bank of Australia (RBA), which last week said the downturn due to the pandemic would likely be less severe than first thought, echoed those sentiments again on Tuesday as it left interest rates unchanged at a record low. at Westpac and RBC Capital Markets acknowledged the upbeat tone of the statement, but added that the announcement was in line with market expectations.
A significant decline in new infections, earlier-than-expected easing of restrictions and signs that hours worked had stabilised in early May also helped lift investor sentiment.
"Success in flattening the infection curve raises the prospect that we will see the low point in activity round May-June," said Frank Uhlenbruch, an investment strategist with Janus Henderson.
"We continue to look for a U-shaped profile for growth."
Financial stocks .AXFJ , coming off their best week on record, ended 0.2% firmer, while an index of tech stocks .AXIJ swelled 1.3%.
Buy-now-pay-later firm Zip Z1P.AX powered 41% higher, its best day in more than five years, after the company agreed to buy out peer QuadPay in a deal that will help it tap into the fast-growing U.S. market. Zealand's S&P/NZX 50 bourse .NZ50 ended 1.4% higher at 11,034.17.