(Updates to close) Jan 25 (Reuters) - Australian shares closed...

(Updates to close)

Jan 25 (Reuters) - Australian shares closed modestly higher on Wednesday, supported by financial stocks that rose on positive leads from U.S. counterparts, and by materials that were underpinned by higher commodity prices.

The S&P/ASX 200 index (xjo) rose 0.4 percent, or 21.40 points, to end at 5,671.50.

The S&P 500 <.SPX> and Nasdaq set record highs on Tuesday in a broad rally led by financial and technology stocks. [.N]

Australia's local financial index .AXFJ snapped six sessions of losses, with the 'Big four' up between 0.4 percent and 1.1 percent.

The metals and mining index .AXMM rose as much as 2.4 percent to its highest in over two years.

Steel and iron ore futures in China rose for a second day on Wednesday, supported by hopes that demand for both commodities will strengthen after the Lunar New Year holiday.

Mining giant BHP Billiton Ltd (BHP) rose as much as 3.5 percent to its highest since June 2015. The world's biggest miner reported a 9 percent rise in iron ore output in its fiscal second quarter.

Rival Rio Tinto Ltd (RIO) gained as much as 3.8 percent, its highest in over two and a half years, after it agreed to sell its unit Coal & Allied Industries Ltd to Yancoal Australia Ltd (YAL) for up to $2.45 billion in cash.

New Zealand's benchmark S&P/NZX 50 index (nz50) closed 0.4 percent, or 26.75 points higher, at 7,090.91, its highest close in over three months.

Industrials led gains, with Port Of Tauranga (POT) ending 2.3 percent higher.