Australia shares bounce as investors swoop on discounts after 2-month rout

* James Hardie surges

* Recovering after 2-month tumble (Adds analysis, quotes, stocks on the move)

SYDNEY/WELLINGTON, May 21 (Reuters) - Australian shares bounced higher on Thursday, defying falls in overseas commodities and equities markets, as investors took advantage of buying opportunities following months of heavy selling.

Global building materials maker James Hardie Industries (Other OTC: JHIUF - news) was the biggest gainer, rising 10 percent after it reported annual net profit had nearly tripled, pushing up the broader market.

Australian stocks have shed 6 percent in two months amid concerns about slowing growth in China, the country's biggest trading partner, tumbling commodities prices and the prospect that rate cuts won't kickstart business spending as quickly as hoped.

Shares (Frankfurt: DI6.F - news) fell on Wednesday but clawed back some of their losses in the afternoon so "it looked like we finally found a bit of a floor", said IG Markets strategist Evan Lucas.

"We were probably due for a bit of consolidation, a bit of an uptick, which is good to see."

The S&P/ASX 200 index gained 36.9 points or 0.7 percent to 5647.2 by 0231 GMT, but still some 350 points off its 2015 peak of March 03, when traders expected it would soon exceed 6,000 points.

All major sectors gained, with iron ore giants BHP Billiton (NYSE: BBL - news) and Rio Tinto (Xetra: 855018 - news) both up about 1.5 percent despite declines in the commodity's price overnight. Rival Fortescue Metals Group firmed 0.5 percent.

Energy stocks likewise split from the oil price, which fell, with Woodside Petroleum (Xetra: WOPA.DE - news) up 1.3 percent, Origin Energy up 2.4 percent and Oil Search 1.7 percent higher.

Banks rose as declines in recent sessions drew investors to their yield potential. Commonwealth Bank of Australia (Other OTC: CBAUF - news) added 1 percent while Westpac Banking Corp and Australia and New Zealand Banking Group each rose about 0.3 percent.

Health stocks gained as a weaker Australian dollar boosted potential profits overseas. Hearing aid maker Cochlear jumped 6 percent and ResMed (NYSE: RMD - news) , which makes products to treat sleep disorders, climbed 2 percent.

New Zealand stocks were flat after paring modest gains with a mixed showing for top stocks which saw the benchmark NZX-50 index fractionally lower at 5755.25.

Telecommunications stock Spark was down 1.8 percent at nine-month lows, with softness also for Fletcher Building (NZSE: FBU.NZ - news) and Contact Energy (NZSE: CEN.NZ - news) .

Kiwi Property Group, the market's biggest listed property investor, was down 2.5 percent as it resumed trading after completing a NZ$151.9 million equity raising.

Some of the bigger moves were among small-cap stocks, with technology company Rakon up 8.7 percent to a near 2-1/2 year high as it posted a small annual profit after several years of hefty losses.

Education provider Intueri Education was down 1.4 percent after it reported trading at the lower end of guidance, while it was being investigated by authorities over its record keeping.

DNZ Property Fund was up 1.5 percent after reporting a lift in its annual profit.

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(Reporting by Byron Kaye and Gyles Beckford; Editing by Eric Meijer)