(Updates to close) Aug 31 (Reuters) - Australian shares closed...

(Updates to close)

Aug 31 (Reuters) - Australian shares closed higher on Thursday, as a survey showing robust Chinese factory activity drove up metal prices in a boost to the mining sector, lifting a related index to a three-year high.

Chinese rebar steel futures trimmed losses and were on track to post their fourth monthly gain in a row, while Shanghai Futures Exchange copper and Iron ore futures also gained.[MET/L] [IRONORE/]

Metal prices gained after a survey showed factory growth in China, Australia's biggest export market, unexpectedly accelerated in August and underpinned the outlook for steel demand.

That helped the S&P/ASX 200 index (xjo) end up 0.8 percent, or 44.779 points, at 5714.5. The benchmark, however, was down 0.1 percent in August for its fourth month of losses.

The metal and mining index .AXMM closed 1.06 percent higher, while the materials index .AXMJ ended at a 3-1/2-year high.

Global miner and index heavyweight BHP Billiton Ltd (BHP) jumped 1.7 percent.

"I think the commodity markets are looking to the fact that the main reason commodity prices fell overnight was strength in the US dollar. There’s no change to the demand scenario globally, nor any on the supply side," said Michael McCarthy, chief market strategist at CMC Markets.

The financial index .AXFJ snapped six straight sessions of losses to close 0.7 percent higher.

Australia and New Zealand Banking Group Ltd (ANZ) rose 1.2 percent, while Commonwealth Bank of Australia (CBA) recouped some of its losses to close 0.6 percent higher.

Shares of CBA have been under relentless pressure, most recently when the Australian Prudential Regulation Authority (APRA) on Monday said it would establish an inquiry into the bank, following its alleged breaches of money-laundering and counter-terrorism finance rules.

New Zealand's benchmark S&P/NZX 50 index (nz50) ended 0.5 percent higher, or 41.9 points, at 7817.1 to record its eighth straight month of gains.

Gains in utilities, health care and industrial sectors pushed up the index.

Auckland International Airport Ltd (AIA) and Contact Energy (CEN) ended 1.8 percent and 2.4 percent higher, respectively.