July 20 (Reuters) - Australian shares closed at a three-week high on Wednesday, led by heavyweight mining and banking stocks amid gains in broader Asian markets on strong U.S. company earnings.
The S&P/ASX 200 index closed 109.6 points or 1.7% higher at 6,759.2, logging its best session since late June. The benchmark shed 0.6% on Tuesday.
Better-than-expected corporate earnings from the United States have helped gains across the board in Australian shares, said Steven Daghlian, a market analyst at CommSec.
Stocks in Asia rallied on Wednesday on the back of the strong U.S. sentiment and the expected resumption of Russian gas flows to Europe, which allayed fears of a recession.
Mining stocks added 2.4%, supported by strong metal prices, with the country's mining triumvariate BHP Group , Rio Tinto and Fortescue Metals Group rising between 1.4% and 5.2%.
Prices of iron ore rebounded after a Chinese official hinted at government stimulus to boost economic growth.
Banks also added to gains, with Commonwealth Bank of Australia, National Australia Bank and Westpac rising between 0.8% and 1.1%.
Australia's central bank governor, Philip Lowe, reiterated his view that further interest rate hikes would be necessary to keep inflation in check.
This comes as the newly elected Labor government announced a review into the central bank's operations amid criticism of its inflation and policy forecasts.
Cloud services firm Megaport Ltd rose 23% in its best session on record, becoming the top gainer on the benchmark index after reporting its first ever quarterly EBITDA profit.
Meanwhile, lithium miner Allkem said it expected lower output in the 2023 fiscal year and higher costs, citing a skilled labour crunch.
New Zealand's benchmark S&P/NZX 50 index added 36.28 points or 0.3% and closed at 11,199.01. (Reporting by Harshita Swaminathan; Editing by Vinay Dwivedi)
