Australia & NZ shares bounce on upbeat data and falling bond yields

(Adds analysis, quotes, stocks on the move)

By Cecile Lefort and Naomi Tajitsu

SYDNEY/WELLINGTON, Jan 8 (Reuters) - Australian and New (KOSDAQ: 160550.KQ - news) Zealand shares bounced higher on Thursday, after encouraging U.S. data boosted risk appetite, while upbeat domestic building approvals further supported sentiment.

The S&P/ASX 200 index gained 33.2 points or 0.6 percent to 5,386.9 by 0132 GMT, snapping two sessions of losses, though the benchmark was still down 1 percent so far this week.

"There is a bit of a relief rally in response to better-than expected data in the United States and Germany," said Michael McCarthy, chief market strategist at CMC Markets.

"We've turned a bit of a sentiment corner and it's seen across all asset classes," he said.

Some of the reprieve came after Australian approvals to build new homes in November jumped 7.5 percent, against forecasts for a fall of 3.5 percent.

The Reserve Bank of Australia has been counting on the housing sector to help the domestic economy cope with a cooling in mining activities.

Also supporting stocks were government bond yields near record lows in much of the developed world, making equity investments attractive. Australia's 10-year bond yield pays a mere 2.7 percent.

Shares (Dusseldorf: DI6.DU - news) in mining companies rose amid stabilisation in the prices of iron ore , Australia's top export earner. Rio Tinto (Xetra: 855018 - news) gained 2 percent, while BHP Billiton (NYSE: BBL - news) was 0.6 percent higher.

Financials also pulled the market higher with ANZ Banking Group and National Australia Bank up around 0.6 percent.

The energy sector lagged with a 0.8 percent loss.

In New Zealand, the benchmark NZX50 index rose 12.2 points or 0.2 percent to 5,570.20, as a rise in Air New Zealand to a one-week high drove a rebound from slight losses the previous day.

Air New Zealand rose 2 percent to NZ$2.60, closing in on a 7-1/2-year high of NZ$2.64 hit late last month after reports that the national carrier had ordered two new Boeing (NYSE: BA - news) 787 aircraft raised optimism about its expansion plans into Asia and North and South America.

Specialised milk processor A2 Milk gained 1.8 percent to N$0.56 following a rise in global dairy prices the previous day that suggested demand for milk products may be recovering following a 50 percent fall in 2014.

Overall, gains were tempered by a 3 percent slide in Kathmandu to a two-year low of NZ$1.96 as the struggling outdoor wear brand remained under pressure on concerns that a weak holiday trading season will weigh on earnings. (Editing by Jacqueline Wong)