Australian shares reverse course to end higher on Trump's trade deal announcement

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By Aaditya GovindRao and Kumar Tanishk

May 8 (Reuters) - Australian shares recouped the session's earlier losses to end higher on Thursday, buoyed by U.S. President Donald Trump's hint at a first trade deal in his global tariff war, while a lukewarm earnings update from ANZ Group dragged banks lower.

The S&P/ASX 200 index .AXJO rose 0.2% to 8,191.7 points. The benchmark had dropped as much as 0.3% earlier in the day.

Trump said he would announce a major trade deal with "a big, and highly respected country" at a press conference on Thursday, sending the exports-heavy Australian market higher. The New York Times later reported that the deal is with Britain.

Overnight, the Federal Reserve kept interest rates steady and Chair Jerome Powell flagged heightened risks of higher inflation and unemployment amid uncertainty around Trump's policies.

Meanwhile, U.S. and Chinese officials will meet this weekend for negotiations after the tit-for-tat tariffs zoomed past 100%.

IG analyst Tony Sycamore said the talks could be the first step toward easing tensions between the world's two top economies, though it was unlikely that tariffs on Chinese imports would get much relief.

Miners .AXMM jumped 0.4%, with gold miners .AXGD gaining 2.2% on bullion's price rise. GOL/

Local uranium miners extended gains after a media report said on Tuesday that the White House is planning executive action to accelerate the deployment of nuclear reactors to meet the soaring energy demand.

Deep Yellow DYL.AX was among the benchmark's top gainers, closing 4.7% higher, with peer Paladin Energy PDN.AX up 2.5%.

Financials .AXFJ dropped 0.6%, with the country's fourth-largest lender, ANZ Group ANZ.AX, losing 1.9% after missing first-half margins estimates as competition pressure and a rise in impairments countered the lending growth.

Westpac WBC.AX slipped 4.1% on trading ex-dividend, falling for its fourth session since its weak earnings report on Monday, while National Australia Bank NAB.AX added 1.4% on Wednesday's upbeat profit update.

New Zealand's benchmark S&P/NZX 50 index .NZ50 shed 0.2% to 12,467.03 points.

(Reporting by Aaditya Govind Rao and Kumar Tanishk in Bengaluru; Editing by Sumana Nandy)

((Aaditya.govindrao@thomsonreuters.com))