Australian shares claw back losses on trade progress, NZ hits record

* Sentiment buoyed by U.S.-China trade talk expectations

* Miners, energy stocks drive benchmark's recovery

* NZ hits fresh peak (Updates to close)

March 28 (Reuters) - Australian shares ended higher on Thursday, as investors cheered signs of possible progress towards a U.S.-China trade deal, with miners and energy stocks leading the comeback.

The S&P/ASX 200 index closed 0.7 percent higher at 6,176.1. The benchmark eked out a meagre 0.1 percent gain on Wednesday.

Reuters reported on Thursday that the United States and China have made progress in all areas under discussion in trade talks, with movement on the touchy issue of forced technology transfers.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin arrive in Beijing on Thursday for a new round of talks with Chinese officials to work out a deal that would end a year-long trade war.

"Supposedly the Chinese are giving space on the tech transfer side of things and IP protections...Mnuchin is in China at the moment and that is going to help the process," said Mathan Somasundaram, a market portfolio strategist at Blue Ocean Equities.

The Australian benchmark was boosted by major iron ore miners Rio Tinto and BHP Group, which gained about 1 percent and 0.4 percent, respectively.

Iron ore prices have risen significantly as a result of lower supply, driven in large part by production issues at Brazil's Vale.

Vale on Wednesday announced a series of writedowns and provisions related to the Brumadinho tailings dam collapse that killed some 300 people two months ago. However, the miner did not provide production guidance, read by many in the market as a sign it is still some way from recovering from the disruptions.

"Continuous problems in Brazil are expected to keep iron ore prices elevated...prices are going to hang around longer than most people expected," Somasundaram said.

Stocks in the energy sector also came back with oil firms Santos Ltd and Woodside Petroleum rising 1.3 percent and 0.7 percent, respectively. Lower oil prices and global demand worries had weighed on energy stocks earlier in the day, sending the sub-index down as much as 0.6 percent to its lowest since Feb. 12.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index ended the session at yet another record high, rising about 0.7 percent to 9,766.19.

The benchmark soared on Wednesday after the country's central bank stunned investors by raising the prospect of a rate cut as its next move.

Air New Zealand Ltd, which added about 2 percent, said it was launching a two-year cost reduction plan and deferred aircraft capital expenditures of about NZ$750 million ($509.78 mln) as part of a business review.

(Reporting by Nikhil Subba in Bengaluru; Editing by Sam Holmes)

2019-03-28 08:28:21

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