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Financials record best day since Oct. 13

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Investors await U.S. Fed minutes

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Energy stocks drop on weaker oil prices

Jan 4 (Reuters) - Australian shares on Wednesday rebounded from a two-month low hit in the previous session, led by gains in banking and mining stocks, while investors awaited minutes from the U.S. Federal Reserve's last meeting.

The S&P/ASX 200 index ended up 1.6% at 7,059.2 points in its best session since Nov. 11.

Investors will get a better picture of the U.S. labour market this week, with a slew of data scheduled to be released, culminating in the employment report on Friday.

Focus will also be on minutes from the Fed's December meeting in which it cautioned that rates may need to remain higher for longer, due to be released later in the day, for cues on the central bank's rate hike path.

The fall in the U.S. dollar on Wednesday has helped strengthen the Australian currency, which could re-ignite traders' risk appetite, especially in the technology sector, said Hebe Chen, market analyst at IG Markets.

Aussie tech stocks posted their best day in a month with sector major Novonix up as much as 8.2% and BrainChip rising as much as 5%.

Financials led the gains, with the "Big Four" banks advancing. ANZ Group Holdings clocked its best session since October 2022, while Westpac Banking Corp posted its biggest single-day gain in nearly three months.

Mining stocks rose 2% despite weaker commodity prices. BHP Group, Rio Tinto and Fortescue Metals gained between 1.4% and 2.4%.

Gold explorers jumped 2.4%, as bullion prices hit their highest levels in more than six months. Newcrest Mining closed the session 0.9% higher.

Energy stocks bucked the trend to drop 1.3%, after oil prices fell overnight on weak China demand data, a gloomy economic outlook and a stronger U.S. dollar.

Sector majors Woodside Energy and Santos lost 2% and 1.1%, respectively.

New Zealand's benchmark S&P/NZX 50 index ended up 1% at 11,587 points. (Reporting by Rishav Chatterjee in Bengaluru Editing by Vinay Dwivedi)