March 20 (Reuters) - Australian shares recovered on Thursday, led by banks after U.S. Federal Reserve Chair Jerome Powell's comments calmed investors rattled by President Donald Trump's tariff threats, and gold stocks jumped as bullion hit a record high.

The S&P/ASX 200 index .AXJO rose 0.7% to 7,881.6, as of 2328 GMT. The benchmark closed 0.4% lower on Wednesday.

Investor sentiment improved globally with Asian stocks set to climb following an upbeat end to Wall Street overnight as Powell calmed investors worried about tariffs from the Trump administration and indicated rates would be cut twice in 2025, after the central bank held its benchmark interest rate steady. .N

In Sydney, banks .AXFJ gained 1.1% and were set for their best session since February 24. All the "big four" lenders gained between 0.8% and 1.7%, while financial conglomerate Macquarie MQG.AX added 1.6%.

Reserve Bank of Australia Assistant Governor Sarah Hunter reiterated earlier in the week that the market remained over-optimistic about the prospects for further rate cuts locally.

Gold stocks .AXGD rose 1%, aided by bullion prices reaching to a fresh high. GOL/

Local miners Northern Star Resources NST.AX and Evolution Mining EVN.AX gained between 1.8% and 1.5%.

Information technology stocks .AXIJ tracked Wall Street gains, rising 1.7%. Sector majors WiseTech Global WTC.AX, Xero XRO.AX and Block XYZ.AX were up between 2% and 3%.

Energy .AXEJ and consumer staples shares .AXSJ traded 0.6% and 0.3% higher, respectively.

The gains were, however, capped by losses in miners .AXMM, after iron ore prices eased overnight.

Among individual stocks, TPG Telecom TPG.AX jumped 2.6% after the local competition watchdog backed its $3.3 billion deal with telecoms company Vocus.

Meanwhile, New Zealand's benchmark S&P/NZX 50 index .NZ50 traded 0.3% higher at 12,087.2.

Fonterra FCG.NZ, the world's largest dairy exporter, added 1.6% after it reported strong first-half earnings and lifted its dividend.

(Reporting by Rishav Chatterjee in Bengaluru; Editing by Rashmi Aich)

((Rishav.Chatterjee@thomsonreuters.com;))

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