Australia, NZ shares extend rally to recover Brexit losses

SYDNEY/WELLINGTON, July 1 (Reuters) - New Zealand shares have this week recovered from sharp falls following the United Kingdom's Brexit vote, while Australian shares have recouped most of their losses as both bourses tracked higher on Friday.

The S&P/ASX 200 index rose 0.74 percent, adding 38.53 points to 5271.9 by 0145 GMT. The benchmark is now trading at a one-week high, although it is still below a top of 5325.4 which was reached last Friday as the Remain vote tracked well in early counting.

"I think that the volatility post-Brexit was the result of fear and an emotional reaction to uncertainty", said senior equities analyst David Walker, of Clime Asset Management.

"Markets had effectively priced in a premium on a successful Remain vote, which of course didn't happen and so the unwinding was really a reaction to that. Investors are realising that there will be a slowdown in the UK ... but it doesn't have the significance in a global scale of a slowdown in the U.S (Other OTC: UBGXF - news) . or China."

Miners led Australia's market higher, with BHP Billiton Ltd adding 3.7 percent, while Newcrest, which gained 3.35 percent and Evolution Mining, which surged 7.9 percent joined a broader rally in gold stocks.

Shares (Berlin: DI6.BE - news) in construction industry software provider Aconex Ltd jumped 11.13 percent to a record high after signing a four-year deal to provide software to Exxon Mobil Corp.

Healthcare shares gained and adult stem cell technology player Mesoblast Ltd stocks rose by 10.7 percent, after the company announced continued funding for the trial of chronic heart failure treatments.

New Zealand's benchmark S&P/NZX (Other OTC: NZSTY - news) 50 index was largely flat on Friday, inching up 0.05 percent or 4.160 points to 6,900.790 as the market took a slight breath after rising for four consecutive gains.

The index was headed for a weekly rise of 3.5 percent, its largest weekly percentage rise since February, as investors parked money in higher-yielding stocks on the expectation that global uncertainty caused by Brexit would keep interest rates low.

The biggest gainer was Kathmandu, which rose 2.61 percent after upwardly revising its full-year earning forecasts on Thursday.

Port of Tauranga (Other OTC: PTAUY - news) rose 1.54 percent, while Property Industries rose 1.27 percent.

Chicken processor Tegel lost 1.21 percent while high-yielding stock Spark fell 1.13 percent as investors took profits after the telecommunications provider rose more than three percent earlier in the week.

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(Reporting by Tom Westbrook and Charlotte Greenfield; Editing by SImon Cameron-Moore)