News: CBA Australian shares rise on financials boost ahead of cenbank decision

Oct 31 (Reuters) - Australian shares rose on Monday, led by financial stocks, ahead of a highly anticipated modest interest rate hike by the central bank this week despite the highest inflation in three decades.

The S&P/ASX 200 index (xjo) was up 1.2% at 6,864.4 points, as of 0017 GMT. The benchmark closed 0.9% lower on Friday.

Wall Street closed sharply higher on Friday with all major U.S. indexes up 2.5% or more on encouraging economic data ahead of the two-day policy meeting of the Federal Reserve this week.

A Reuters poll found that respondents expect the Reserve Bank of Australia to raise interest rates by a modest 25 basis points for the second meeting in a row on Tuesday. The central bank tempered the pace of hiking in its last meeting to support economic growth.

Financials .AXFJ jumped as much as 1.3% with Australia's "Big Four" banks up between 0.8% and 1.7%. The country's No. 1 lender Commonwealth Bank of Australia (CBA) climbed the most with a 1.7% jump.

Tech stocks .AXIJ added most among sub-indexes, with a surge of nearly 4%, their biggest intraday pct jump since Oct. 18.

Among individual stocks, Australia-listed Nitro Software (NTO) rose 19.7% as the company said it intends to recommend the nearly A$500 million takeover offer by Canada's Alludo after it rejected a A$1.80 per share bid from Potentia Capital Management.

Coronado Global Resources (CRN) was the biggest gainer in the benchmark index, rising as much as 9.1%, after it reported annual group revenue more than doubling to $2.85 billion year-to-date.

Bucking the positive mood, mining .AXMM , energy .AXEJ and gold stocks .AXGD traded in the red following a slump in commodity prices.

New Zealand's benchmark S&P/NZX 50 index (nz50) rose 0.8% to 11,213.05 points.

The Reserve Bank of New Zealand said its annual stress test on the banking sector showed banks were "well-placed" to overcome stagflation.