Australia shares rally 1 pct, dovish RBA helps

(Adds analysis, quotes, stocks on the move)

By Cecile Lefort and Naomi Tajitsu

SYDNEY/WELLINGTON, March 17 (Reuters) - Australian shares rallied 1 percent on Tuesday, after the Reserve Bank of Australia (RBA) left the door wide open for another cut, encouraging investment in shares.

The S&P/ASX 200 index jumped 57.2 points to 5,854.9 by 02:39 GMT, pulling closer to a seven-year high touched early this month. The benchmark dipped 0.3 percent on Monday.

Shares (Berlin: DI6.BE - news) gained across the board, having taken the lead from an upbeat Wall Street and then a dovish RBA. Minutes of its March policy meeting showed the central bank believed a pause this month was prudent following an easing in February.

Energy stocks enjoyed a relief rally with Karoon Gas up 11 percent, while Santos and Origin rose more than 2 percent.

Utilities and telecommunications were also up around 1.5 percent, followed closely by financials. Major miners BHP Billiton gained 1.3 percent after it revealed details of its South32 spinoff.

Rio Tinto (Xetra: 855018 - news) added 0.5 percent, but Fortescue Metals slipped on news of a U.S. debt refinancing.

"The volatility continued in Fortescue," said Tristan K'nell, head of trading at Quay Equities. "The miner (is) taking a proactive approach to managing its balance sheet."

Sirtex Medical A tumbled by more than half to touch the lowest in a year after it said a trial found its Sirlox chemotherapy treatment failed to materially improve colorectal cancer recovery.

New Zealand's benchmark NZX50 share index was largely flat at 5,905.79 at 2357 GMT, as losses in Meridian Energy held the index back from adding to a fresh lifetime closing high of 5,911.40 hit on Monday.

Meridian fell 3.8 percent to NZ$2.05 as a run up to NZ$2.165 last week prompted investors to book profits. Shares hovered near NZ$2.20 hit earlier this month, their highest since the government reduced its stake in the company in late 2013.

With the deadline for a second instalment of share payments due in May, some market participants see the risk of more selling in Meridian as investors may sell their shares to book profits or pay the balance. The shares have more than doubled their IPO price of NZ$1.00.

Heartland Bank fell 2.2 percent to NZ$1.33, keeping shares below a lifetime high of NZ$1.42 hit last month.

The small bank suffered after separate announcements that three substantial shareholders had reduced their stakes late last week prompted more selling.