Australia shares extend gains on rate cut hopes

* Shares (Berlin: DI6.BE - news) up 1.3 pct, second straight session of gains

* Index has risen 6 out of the last 10 sessions

* Iron ore price slump fuels rate cut hopes

* Banks, materials, energy sectors among major gainers

* 161 shares up, 29 down, 10 unchanged (Adds analysis, quotes, stocks on the move)

By Swati Pandey and Gyles Beckford

SYDNEY/WELLINGTON, April 7 (Reuters) - Australian shares posted their best performance in nearly three weeks on Tuesday as expectations grew that the Reserve Bank of Australia would cut interest rates again later in the day.

Pressure is mounting for the RBA to follow up a February easing with another quarter point cut to an all-time low of 2.0 percent as plunging prices for iron ore, Australia's single most valuable export earner, punish both mining profits and government tax revenue. Iron ore prices are at decade lows.

The S&P/ASX 200 index jumped 1.3 percent, or 79.02 points, to 5,977.6 by 0119 GMT, its second straight session of gains. The benchmark rose 0.7 percent on Thursday before the Friday through Monday Easter holiday. It has risen in six out of the last 10 sessions.

"We think they (RBA) will (cut) because the economy is not firing on all cylinders and because commodity prices continue to fall," said Chris Conway, Head (Stuttgart: HD3.SG - news) of Research at Australian Stock Report.

Conway expects healthcare and banking stocks to benefit from a rate cut. "Companies with U.S. dollar earnings will also get a boost," he said.

All sectors participated in Tuesday's rally, with banks and materials rising the most. Big banks including CBA and NAB jumped over 1 percent.

Miner BHP was up 1.6 percent while Rio Tinto (Xetra: 855018 - news) rose nearly 1 percent. Among healthcare shares, CSL and Ansell (Other OTC: ANSLF - news) rose about 1.3 percent.

Oil companies such as Woodside Petroleum (Xetra: WOPA.DE - news) , Oil Search and Santos were up 1-3.7 percent.

New Zealand's benchmark NZX50 index was 0.4 percent firmer at 5,855.01, its best position in a week, with support for several top stocks underpinning the market.

The market's No. 1 stock, telecommunications company Spark was 2 percent higher, Contact Energy (NZSE: CEN.NZ - news) was up 1.5 percent at NZ$5.99, and Auckland International Airport was 1.1 percent higher at NZ$4.52.

Retirement village operator Summerset was up more than 3 percent at NZ$3.43 after reporting record sales for a first quarter.

That rubbed off on rival rest home operator Metlifecare which gained 2.1 percent to NZ$4.80, albeit on slim volumes.

Outdoor clothing and goods retailer Kathmandu was up 1.5 percent at NZ$1.36, as bargain hunters looked to pick up the stock after it hit its lowest since July 2012, following its first half loss and an uncertain outlook.

(Editing by Eric Meijer)