Australia shares gained 1% on Tuesday to hit their highest level in more than two weeks, lifted by heavyweight miners on the back of surging iron ore prices and as Macquarie Group, the world's top infrastructure investor, posted record quarterly earnings.

The benchmark S&P/ASX 200 index ended 1.1% firmer at 7186.7, its highest closing level since Jan. 21.

The benchmark ended 0.1% lower on Monday.

Miners were the biggest boost to the benchmark, climbing 2.4% after concerns over tight supply along with recovering steel production helped iron ore prices scale their highest levels in more than three months.

Sector heavyweights BHP Group, Rio Tinto and Fortescue Metals Group gained between 2.2% and 3.7%.

Australian shares weighed down by banking, healthcare stocks

Macquarie Group saw its best session in five months on "record" quarterly performance, backed by strong commodity markets and asset sales in infrastructure.

The company's 5.6% intraday jump helped financials recover from previous session's weak performance to close 1.4% higher, with the "Big Four" banks advancing between 0.3% and 1.5%.

"We are in the start of the reporting season and that is crucial for the index to push ahead. But it is unlikely we will get all-time highs in the near future because of the headwinds that inflation causes," said Henry Jennings, senior analyst and portfolio manager at Marcustoday Financial Newsletter.

Various surveys showed that Australian business conditions turned worse in January as a surge in coronavirus cases hit consumer spending while inflation continued to create problems amid unresolved supply chain issues.

Among other sectors, healthcare and energy stocks advanced 0.7% and 0.6%, respectively. Technology stocks were the only laggards in the index, closing 1.6% lower, after tracking an overnight fall on Wall Street's tech-heavy Nasdaq index.

Australia-listed shares of Block Inc lost 6.3% to finish at a record low.

New Zealand's benchmark S&P/NZX 50 index rose 0.3% to finish the session at 12,319.34.