Australia shares cross 9,000 level for first time, banks fuel rally

ASX200 hits all-time high of 9,019.10

Banks hit record closing high, log 6-day rally

CSL up 2.4% after two-session selloff

NZ50 extends gains to second day

Updates to market close

By Nikita Maria Jino

Aug 21 (Reuters) - Australian shares crossed the key 9,000 level for the first time on Thursday, with index heavyweight financials leading the rally in broad-based buying as investors shrugged off concerns of stretched valuations to pile into the sector.

The S&P/ASX 200 index rose 1.1% to a record level of 9,019.10, also an all-time closing high. It had gained 0.3% on Wednesday.

The benchmark has been on a stellar run this month, logging record closing highs in seven sessions out of 15, bolstered by upbeat corporate earnings, an interest rate cut and signals of further monetary policy easing.

Australian equities have been trending expensive in recent years, but with company earnings largely in line with market expectations, there is no obvious catalyst to cause any broad derating, said Lochlan Halloway, equity market strategist at Morningstar.

"The market seems to be happy to pay more for earnings than it has in the past. This breach of the 9,000 threshold is a continuation of that," he said.

Financials rose for the sixth consecutive session to hit an all-time closing high. Commonwealth Bank of Australia rose 0.8%, but is down nearly 3% since it reported record annual profit on concerns of overvaluation.

Investors are rotating into banks from large-cap companies like and in view of their safe-haven quality as opposed to a material improvement in fundamentals, Halloway said.

Healthcare stocks also lifted the benchmark, rising 0.9%. Biotech major CSL climbed 2.4% after a two-session selloff that saw the stock lose nearly A$25 billion ($16.05 billion) in market value.

Miners gained 1.3% as iron ore prices rebounded. BHP and Rio Tinto rose 0.7% and 1%, respectively.

New Zealand's S&P/NZX 50 index extended gains to a second session and closed 0.9% higher at 13,194.07.

($1 = 1.5579 Australian dollars)

(Reporting by Nikita Maria Jino in Bengaluru; Editing by Subhranshu Sahu)

((Nikita.Jino@thomsonreuters.com [Nikita.Jino@thomsonreuters.com];))