* Banks underpin as ECB cuts rates to record lows
* Market set to fall 0.6 percent for the week
* Gold stocks firmer as bullion gains nearly 1 pct overnight (Adds analysis, quotes, stocks on the move)
By Thuy Ong and Naomi Tajitsu
SYDNEY/WELLINGTON, June 6 (Reuters) - Australian shares climbed off a two-week low on Friday, as global risk assets were cheered by the European Central Bank’s latest stimulus steps to fight off the risk of deflation, sending Wall Street to new record highs.
With the U.S. Federal Reserve committing to keeping interest rates at current lows for an extended period, the ECB action was seen as strengthening the sources of global liquidity - a major driver of equities in recent years.
The ECB’s easing has “popped more liquidity into the global financial system,” said Tim Radford, global investment manager at Rivkin Securities in Sydney. “It’s really helped risk appetite among investors globally.”
However, gains in Sydney “are pretty muted compared to what we’ve seen on offshore markets,” Radford said, noting that investors were also cautious ahead of the key U.S. non-farm payrolls report later in the day.
The Dow and the S&P 500 both ended at new highs on Thursday, providing sufficient catalysts to lift Australia’s S&P/ASX 200 index 23.7 points, or 0.4 percent, to 5,460.6 by 0215 GMT. The benchmark fell 0.2 percent on Thursday to a two-week low, slipping for a third day and is set to fall 0.6 percent for the week.
The index hit a near 6-year high of 5,554.5 on April 29, but has since traded mostly sideways over concerns on over a contractionary budget and a rout in commodity prices.
All ‘Big Four’ banks were up in early trade, with Commonwealth Bank of Australia and National Australia Bank both adding 0.8 percent.
Gold miners were also in good heart as bullion rose nearly 1 percent, posting its biggest gain in three weeks after the ECB’s rate cut. Beadell Resources Ltd jumped 4.1 percent, while Northern Star Resources Ltd bounced 4.3 percent.
Sundance Resources Ltd tumbled 9 percent after appointing Mot-Engil Africa to build a A$3.5 billion port and rail infrastructure for the Mbalam-Nabeba iron ore project.
Lynas Corp Ltd dropped 6.5 percent, adding to the previous session’s tumble after suddenly replacing its CEO with a telecommunications executive following prolonged delays in ramping up its Malaysian rare earths plant to full capacity.
New Zealand’s benchmark NZX-50 index rose 11.6 points to 5,171.10, supported by gains in exporters.
Recent weakness in the New Zealand dollar has offered a reprieve to Fisher & Paykel Healthcare and Fletcher Building, whose offshore earnings have been stung by a historically strong currency.
Shares in F&P Healthcare, which manufactures respiratory care products, rose roughly 2 percent to an eight-year high of NZ$4.69, and was creeping towards a lifetime high.
“With the recent weakness we’ve seen in the New Zealand dollar, investors are seeing it as a way to get exposure to F&P Healthcare,” said James Smalley, director at brokerage Hamilton Hindin Greene in Christchurch.
Fletcher Building, New Zealand’s largest listed company which earns most of its revenue offshore, also rose 2 percent to NZ$9.10.
Editing by Shri Navaratnam