By Shashwat Pradhan
Aug 15 (Reuters) - Australian shares extended their rally on Tuesday, supported by strength on Wall Street as investors breathed a sigh of relief following ebbing tensions between the United States and North Korea.
The S&P/ASX 200 index .AXJO rose 0.7 percent or 40.39 points to 5,770.8 by 0248 GMT. The benchmark climbed 0.7 percent on Monday.
U.S. stocks recovered further on Monday after a searing selloff last week, with the S&P 500 scoring its biggest one-day percentage gain since April as concerns about a possible conflict between the United States and North Korea eased.
"Markets do not like uncertainty. Uncertainly equals risk. But what we have seen is a toning down from the American side with regards to North Korea," said James McGlew, executive director of corporate stock broking for Argonaut in Perth.
U.S. officials on Sunday played down the risk of an imminent war with North Korea. Those concerns had helped wipe out nearly $1 trillion from global equity markets last week. positive sentiment on Wall Street spilled over into Australian stocks, with financials driving the gains.
Australia and New Zealand Banking Group ANZ.AX was among the top gainers in the financial sector, jumping 1.4 percent after the country's No. 4 lender said third quarter cash profit rose 5.3 percent from the previous two quarters. banks are all looking at nice increases in ANZ's cash profit. Also, ANZ has made it clear to the market that they are in compliance with their anti-money laundering regulations."
In other banks, Westpac Banking Corp WBC.AX and National Australia Bank NAB.AX were each up 1 percent.
Sentiment was also buoyed by comments from the Australian central bank. Minutes from the Reserve Bank of Australia's August policy meeting showed the bank was confident of a pick-up in inflation and jobs, forecasting a couple of years of "above potential" growth in the economy. Ltd CSL.AX and Telstra Ltd TLS.AX were the other big gainers among blue chip stocks, advancing 1.3 percent and 1 percent respectively.
At the other end, shares of Domino's Pizza Enterprises DMP.AX tumbled as much as 22.7 percent to a near-two year low after the fast-food chain missed full-year profit expectations due to sluggish sales in Japan and France. giant Fortescue Metals FMG.AX slipped over 2 percent, hurt by a more than 4 percent drop in Chinese iron ore futures on Monday.
New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.77 percent or 59.87 points to 7,821.81.
The index was up as much as 0.81 percent earlier in the session to hit a record high.
The gains were broad-based with all sectors in the black.
Contact Energy CEN.NZ underpinned the gains, jumping as much as 3.6 percent to scale a more than two-year high.
For more individual stocks activity click on STXBZ