Australia shares gain as US infrastructure bill raises recovery hopes

Australian stocks rose on Friday, led by banks and mining stocks, after US President Joe Biden embracing a bipartisan Senate infrastructure deal raised hopes of a recovery in the world's largest economy.

The benchmark S&P/ASX 200 closed 0.5% higher at 7,308.0, but notched its first weekly loss in six as surging COVID-19 cases in the country's most populous state, New South Wales kept markets on edge through the week.

Global stocks rallied and Wall Street set record highs overnight after Biden declared "We have a deal" to renew the infrastructure of the United States.

"The infrastructure announcement means there will be a while lot of cash injection into the system. It means, there will be a strong demand for materials, and that will definitely benefit the Australian market," said Brad Smoling, managing director at Smoling stockbroking.

Domestically, miners rose 1% as ironore prices gained, with BHP Group Ltd and Fortescue Metals Group rising 0.6% and 0.8%, respectively.

Global miner Rio Tinto Ltd recorded a 1.4% weekly gain, marking its best week since early May.

Gold stocks also rose as bullion prices steadied, with Newcrest Mining gaining 1.6% and marking its best session since June 11.

Financials rose 0.6%, boosted by the the so-called "Big Four" banks.

Commonwealth Bank of Australia, Australia and New Zealand Banking Group, National Australia Bank and Westpac Banking Corp rose between 0.2% and 0.9%.

Hurt by the surging virus cases, travel stocks such as Flight Centre Travel Group and Webjet Ltd posted weekly losses of 6.5% and 4.5%, respectively.

Downtown Sydney and the city's eastern suburbs, which include Bondi Beach, will go into a one week lockdown from midnight Friday.

In New Zealand, the benchmark S&P/NZX 50 index ended 0.3% higher at 12,626.09. Dairy producer a2 Milk closed up 2.9% and was the top gainer on the bourse.