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By Adwitiya Srivastava

Jan 21 (Reuters) - Banking stocks lifted Australian shares on Tuesday, with miners adding to the gains after index heavyweight BHP Group BHP.AX reported higher second-quarter production.

The S&P/ASX 200 index .AXJO was up 0.7% at 8,402.2 at the close. The benchmark logged its highest close since Dec. 9.

Financials .AXFJ gained 1.3%, ending at their highest level since Jan. 8. The 'big four' banks rose by 0.7%-1.9%.

Globally, markets are bracing for a slew of policy changes under President Donald Trump.

Investors in Australia are assessing the first hours and announcements of Trump’s return to office and have been moving into safe-haven areas of the market as a result of uncertainties around his policies, said Grady Wulff, a market analyst at Bell Direct.

"Over the last 12 months, we have seen investors bolster their positions in the big four banks of Australia due to their safe-haven nature and secure returns."

The mining index .AXMM added 1% on Tuesday to close at its highest since Dec. 12 after BHP Group BHP.AX - the world's largest listed miner - reported an uptick in iron ore production for the December quarter and a 17% jump in its copper output.

The miner's shares closed 0.7% higher. They jumped as much as 1.8% earlier in the day, hitting their highest level since Dec. 13.

The gains in the index were also supported by higher iron ore prices on improving sentiment in China. IRONORE/

Gold stocks .AXGD advanced 1.9% as bullion prices rose. GOL/

Discretionary stocks .AXDJ gained 0.9%, lifted by a 1.3% rise in top retailer Wesfarmers WES.AX after it said its loss-making online retailer Catch will cease to operate as a stand-alone entity in fiscal year 2025.

New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.3% to finish the session at 13,052.9 points.

(Reporting by Adwitiya Srivastava in Bengaluru; Editing by Sonia Cheema)

((Adwitiya.Srivastava@thomsonreuters.com))

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