(Updates to close) Dec 7 (Reuters) - Australian shares ended...

(Updates to close)

Dec 7 (Reuters) - Australian shares ended Wednesday higher on the back of Wall Street's record close, led by the financial and materials sectors, even after news that the Australian economy contracted last quarter.

Data issued on Wednesday, showed that the economy shrank 0.5 percent last quarter as businesses, consumers and government all cut back on spending.

Investor sentinment, though, was buoyed by hopes that policymakers may provide more monetary or fiscal stimulus and as Wall Street climbed on Tuesday with telecom majors and banking sector driving the gains. [.N]

The S&P/ASX 200 index (xjo) closed 49.4 points, 0.9 percent, higher at 5,478.1.

The financial index .AXFJ was up 1.2 percent with the four major banks gaining over 1 percent each.

Global miner BHP Billiton (BHP) rose nearly 1 percent while Rio Tinto (RIO) and Fortescue Metals (FMG) gained 2.8 and 4 percent respectively.

But the energy index .AXEJ was down over 1 percent, as oil prices fell, with the decline led by Origin Energy (ORG) which fell to its worst day in nearly a month.

Qantas Airways (QAN) on the other hand rose 1.9 percent on cheaper fuel.

New Zealand's benchmark S&P/NZX 50 index (nz50) ended 0.3 percent, or 21 points, lower to finish the session at 6889.77.

The decline was led by utilities and health care sectors as Meridian Energy (MEL) fell over 1 percent and Ryman Healthcare (RYM) shed 0.6 percent.

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