Australian shares closed more than 1% higher on Wednesday, as top lender Commonwealth Bank of Australia soared on a forecast-beating surge in half-year profit and investor services provider Computershare led a rally in tech stocks.

The benchmark S&P/ASX 200 index rose 1.1% to 7,268.10 after Tuesday's 1.1% gain.

Shares of Commonwealth Bank of Australia jumped 5.6% to a three-week closing high and marked their best session in nearly two years, after a boom in home loans drove first-half profit above estimates.

That helped financials gain 2.6% in their best day in more than four months. The other three banks among the "Big Four" firmed between 1.7% and 2.4%.

Technology stocks were the top percentage gainers in the benchmark, adding 4.2% in their best session in six months, driven by an 11.2% jump in Computershare after the company reported strong half-year earnings late on Tuesday.

Australia shares set for biggest weekly gain since late-December

Xero Ltd, WiseTech Global and ASX-listed shares of Block Inc advanced between 1.4% and 4.7%, following a strong overnight finish by the tech-heavy Nasdaq.

Meanwhile, a measure of Australian consumer sentiment fell for a third month in February as rising costs of living undermined finances amid prospects of higher interest rates.

"We are going into a low-growth environment, where it is very difficult for central banks and governments to find balance between interest rates and inflation," said Brad Smoling, managing director at Smoling Stockbroking.

Referring to the US inflation report due on Thursday, he said, "it could be a catalyst for another downward leg of selling or we could see a substantial rally right across the board."

Among other sectors, miners lost 0.6% after Chinese iron ore futures plunged more than 5%. BHP Group shed 1.7% and Mineral Resources dropped 8.9% to its worst day since September 2020.

New Zealand's benchmark S&P/NZX 50 index rose 0.9% to 12,433.95, its highest close in more than two weeks.