Aussie stocks extend gains to 3% on crisis end hope

Australian shares extended gains to 3.3 percent on Friday as investors snapped up financial stocks that had been battered in recent days, reassured as global authorities tried to soothe markets.

Investment bank Macquarie Group Ltd rallied 30 percent to A$34.00 after plunging in recent days on concerns about its ability to fund its business model.

Central banks around the world pumped billions of dollars into credit markets and U.S. authorities shopped a plan to mop up bad loans after previous actions including bailouts had failed to restore market confidence.

"It's a relief, it allows for an orderly workout for the impaired assets and it will help the banking sector get back to business," said Hans Kunnen, head of investment markets research at Colonial First State Fund Managers.

But he warned the mood would remain cautious given the extent of the turmoil in markets.

"It's always encouraging to see recoveries, but the market is still below 5,000 so it's cold comfort for some," he added.

"There remain those who have an overall bearish disposition and if our economy slows, then it will be difficult for the banks to do strong business," Kunnen said.

The benchmark S&P/ASX 200 index rose 150.6 points to 4,757.9, recovering after falling 2.4 percent on Thursday to a near three-year closing low. It had lost 6 percent over the first four days of this week.

New Zealand's NZX-50 index was up 1.5 percent at 3,206.6.

STOCKS IN THE NEWS

* Miners such as BHP Billiton rose after copper prices recovered somewhat from nine-month lows. BHP was up 2.5 percent to A$35.87.

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* National Australia Bank led the gains among the big four banks, jumping 9.9 percent to A$21.53, while ANZ Banking Group gained 7.2 percent to A$16.57.

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* Shares in troubled Centro Properties Group rose 18.2 percent to A$0.091 after the group said it sold two Australian shopping centres for A$157.5 million, just days after a much bigger U.S. mall sale fell through.

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(Reporting by Victoria Thieberger; editing by Jonathan Standing)

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