News: XMM Australian shares finish near 2-1/2-year high; NZ falls

(Updates to close)

Nov 3 (Reuters) - Australian shares ended near their highest level in two-and-a-half years on Friday, amid broad-based gains driven by materials and financials stocks.

Eight out of 10 sectors closed the day in positive territory as the S&P/ASX 200 index (xjo) advanced 0.5 percent, or 28.193 points, to 5,959 at the close of trade. The benchmark index rose 1 percent for the week.

Materials led the upward charge of the index with metals and mining index .AXMM climbing 1 percent to its highest since August 2014.

Benchmark iron ore DCIOcv1 on the Dalian Commodity Exchange rose for a third day, gaining 1.1 percent to 442 yuan on unexpected physical demand. [IRONORE/]

Mining giant Rio Tinto Ltd (RIO) rose 1.1 percent to an over 6-year high, while its peer BHP Billiton Ltd (BHP) gained 1.2 percent.

The Australian financials index .AXFJ firmed 0.4 percent, with Westpac Banking Corp (WBC) accounting for most of the gains.

Westpac, the country's No.2 lender, said on Friday it had agreed to sell its Hastings fund management business to a London-based asset manager, in the latest move by a big Australian bank to offload a capital-intensive division. Westpac closed the day up 0.8 percent.

New Zealand's benchmark S&P/NZX 50 index (nz50) fell 0.22 percent, or 17.940 points, to finish at 8,065.120. The index ended the week 0.25 percent lower, registering a second consecutive week of losses.

Dairy firm a2 Milk Company (ATM) fell 3.2 percent and was the biggest drag on the index.

Conversely, Fletcher Building Ltd (FBU) gained 2.6 percent on Friday, its best day since Sept. 25.