May 23, 2014 / 2:20 AM / 4 years ago

Australia shares post modest gains on Wall Street, banks

* Banks underpin market as investors chase high yields

* Oil stocks cap broader gains as prices fall overnight

* Spotless Group debuts up 9 pct (Adds analysis, quotes, stocks on the move)

By Thuy Ong and Naomi Tajitsu

SYDNEY, May 23 (Reuters) - Australian shares edged up to a one-week high on Friday, supported by an uptick on Wall Street and gains in major banks, though weakness in energy stocks capped broader moves higher.

Westpac Banking Corp and Australia and New Zealand Banking Group both climbed 1.1 percent and midsize lender Bank of Queensland Ltd added 0.8 percent, as investors chased relatively high yields.

The “Big Four” banks have dividend yields of between 4.8 percent and 5.8 percent, compared with savings accounts that typically pay between 2 percent and 3 percent interest.

“I definitely think the high yield play is out there at the moment,” said Tim Radford, global investment manager at Rivkin Securities in Sydney.

However, “I think we’ll see the market will take a bit of a pause for now. I think stocks globally have been in this side-range trading environment,” he added.

The S&P/ASX 200 index was up 0.4 percent or 21.2 points at 5,501.1 at 0131 GMT. The benchmark gained 1 percent on Thursday, its biggest one-day percentage rise since Feb. 12.

On the month, the index is up 0.2 percent.

Oil and energy producers weakened after oil prices fell overnight. Woodside Petroleum Ltd dropped 1.3 percent and Oil Search Ltd slipped 0.3 percent.

Gold and nickel miner Regis Resources Ltd tumbled 10.5 percent to A$2.04, its lowest since March 2011, on a disappointing operating and production guidance update.

Treasury Wine Estates Ltd gained 4 percent after Fairfax media said China’s Bright Food Group Co Ltd is considering a takeover bid for the company. On Tuesday, Treasury said it had rebuffed a takeover bid from U.S. private equity firm KKR.

Elsewhere, cleaning and catering company Spotless Group Holdings Ltd debuted on Friday at a 9 percent premium to its initial public offering price. The stock traded at A$1.75, versus the issue price of A$1.60.

New Zealand’s benchmark NZX50 index inched up 0.2 percent, led by a near-6 percent jump in Metlifecare Ltd to a six-month high of NZ$4.45, after the rest home operator raised its full-year profit guidance to NZ$43 million-NZ$46 million ($36.9 million-$39.4 million).

Fisher & Paykel Healthcare touched a three-week low of NZ$4.05 after the medical equipment maker said a strong currency would weigh on profits in 2015. It later recovered to trade flat at NZ$4.17 by midday. (Editing by Chris Gallagher)

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