(July 5): Australian shares closed at their highest since late 2007 on Friday, and produced a large weekly gain as monetary policy easing and stronger commodity prices pushed up stocks across the board.

The S&P/ASX 200 index rose 0.5% or 33.30 points to 6,751.30 at the close. The benchmark added 2% for the week, and was about 100 points off a record high reached in 2007.

Financials and real estate stocks lent most support to the benchmark. Three of the Big Four banks advanced, with Commonwealth Bank of Australia, the largest lender, leading with a 0.9% gain. ANZ had a marginal loss.

Finance stocks were cheered by the country's prudential regulator loosening mortgage lending rules just a few days after the Reserve Bank of Australia cut interest rates for the second month in a row. Weak economic data has also seen increased bets for further easing later in the year.

Real estate stocks such as Dexus, Scentre Group and Goodman Group, which rose through the week, gained between 1.9% to 2.2% on Friday.

Corporate services provider Eclipx Group was the day's largest gainer on the ASX 200, closing more than 20% higher after it announced the sale of two e-commerce portals.

Mining stocks saw some profit-taking after a strong series of gains on robust commodity prices. The mining subindex closed 1.2% lower on Friday, but for the week had a fourth straight rise.

New Zealand stocks rose 0.5% to a fourth consecutive record close. Support came chiefly from the local stocks of Australian banks and heavyweight utility stocks.

The benchmark S&P/NZX 50 index climbed 0.5% or 57.19 points to finish the session at 10,615.47. It added 1.1% for the week, its fourth straight week of gains.

The local stock of Westpac Banking Corp ended 1.2% up and electricity retailer Meridian Energy added 2.7%.

Shares of co-operative Fonterra , the world's largest dairy producer, surged 5.1% on Friday after plunging to a record low the previous day.