(Updates to close)
Sept 13 (Reuters) - Australian shares ended flat on Wednesday, after financials pared earlier gains that had tracked Wall Street's highs and telecom stocks weighed on the index.
The S&P/ASX 200 index (xjo) ended 0.04 percent lower or 2.141 points to 5744.3 after two sessions of gains.
Financials gave away most of the gains recorded earlier in the day with the sector index .AXFJ ending 0.3 percent higher after rising as much as 0.9 percent.
Commonwealth Bank of Australia (CBA) ended 0.8 percent higher versus its intraday peak up 1.4 percent and National Australia Bank (NAB) shed 0.2 percent.
Australia's prudential regulator said that money-laundering accusations levelled at Commonwealth Bank had not affected its depositors.
Australia's corporate regulator on Tuesday took aim at the 'Big Four' major banks, saying they were very powerful with "a lot of hubris" and not used to being taken on by regulators.
Australia and New Zealand Banking Group Ltd (ANZ) and Westpac Banking Corp (WBC) gained 0.5 percent and 0.2 percent, respectively.
Material stocks outperformed other sectors with BHP Billiton (BHP) and Rio Tinto (RIO) leading the gains as iron ore futures in China jumped more than 2 percent. [IRONORE/]
BHP Billiton ended 1 percent higher and Rio Tinto gained 1.1 percent to close three-and-a-half year high. South32 Ltd
gained 0.6 percent to end at a record high. Gold miner Newcrest Mining Ltd (NCM) said on Wednesday it had restarted production at a second part of its flagship Cadia gold mine, which was damaged in an earthquake in April, pushing its shares 0.9 percent higher.
Shares of Telstra Corporation Ltd (TLS) dropped 1.9 percent while Wesfarmers Ltd (WES) slid 1 percent as Standard and Poor's revised the company's outlook to 'negative' from 'stable'.
A survey published earlier in the day showed that consumer sentiment bounced modestly in September as worries over family finances warred with growing optimism about the economic outlook.
The survey showed that consumer sentiment rose 2.5 percent in September, from August when it dropped 1.2 percent.
New Zealand's benchmark S&P/NZX 50 index (nz50) fell 0.2 percent or 12.98 points to 7827.43, as investors await Thursday's manufacturing PMI data.
The industrial sector led the declines with Auckland International Airport Ltd (AIA) ending 1.4 percent lower followed by the material sector.
Fletcher Building Ltd (FBU) fell 1.4 percent closing at 1 month low.
The health care sector provided some support to the index with Fisher & Paykel Healthcare (FPH) ending an 11th consecutive session of gains to close at a record high.
