June 20, 2018 / 6:46 AM / 5 months ago

Australian shares hit highest since January 2008, led by banks; NZ up

* Aussie benchmark climbs more than 1 pct

* Banks lead gains on weaker local currency

* NZ rises ahead of GDP data on Thursday (Updates to close)

June 20 (Reuters) - Australian shares closed at their highest level in nearly 10-1/2 years, driven by a rally in banks, but a fall for Telstra after it flagged major job cuts and asset sales in a “strategic reset” capped Wednesday’s gains.

The S&P/ASX 200 index rose 1.2 percent or 70.50 points to finish at 6,172.60, the highest close since Jan. 4, 2008. The benchmark was flat on Tuesday.

Banks accounted for most of the gains on Wednesday, with the financial index rising more than 2.3 percent to its highest since May 17.

Financial stocks have rallied of late on weakness in the Australian dollar, which has been sinking in the wake of intensifying trade tensions between the United States and China.

Commonwealth Bank of Australia (CBA), the biggest lender, rose 2.9 percent on Wednesday to a six-week high.

CBA said the Federal Court had approved a settlement agreement to civil proceedings related to money laundering charges, closing a chapter that has cost the bank A$700 million ($518 million) in penalties.

Other blue-chips in the sector, Westpac Banking Corp firmed 2.9 percent to a near five-week high, and Australia and New Zealand Banking Group Ltd jumped 2.7 percent.

Health care stocks also advanced, with index heavyweight CSL Ltd rising 1.1 percent to a record high, while Cochlear Ltd strengthened 2.2 percent.

Telstra Corporation Ltd slumped about 4.8 percent after it said it would cut a quarter of its workforce and flagged asset sales, as competition and new technology crush its mainstay fixed-line businesses and force a strategic reset.

In New Zealand, the benchmark S&P/NZX 50 index firmed 0.5 percent or 42.55 points to finish at 8,905.79 ahead of GDP data due on Thursday.

Consumer staples led the gainers, with A2 Milk Company Ltd rising 2 percent and Synlait Milk Ltd adding 0.9 percent. (Reporting by Aditya Soni in Bengaluru; Editing by Richard Borsuk)

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