Miners, energy stocks power Australian shares as commodity prices shine

* Miners, energy stocks lead gains

* Benchmark posts first weekly loss in three

* Santos, Oil Search finalise merger terms (Updates to close)

Sept 10 (Reuters) - Australian shares rose on Friday as strong metals and oil prices powered commodity stocks, while the easing of COVID-19 lockdowns in most of Victoria state also fuelled sentiment.

The S&P/ASX 200 index climbed 0.5% to finish the session at 7,406.6 points, but notched its first weekly loss in three. The benchmark had dropped 1.9% on Thursday.

“Optimism returned in the share market after most of the regions in Victoria exited shutdowns, fuelling hopes of a revival in business activity and speculations are rife that Sydney and Melbourne may also emerge out of extended lockdowns in the coming weeks,” Kalkine Group CEO Kunal Sawhney said.

Australian energy stocks advanced 0.9% as oil prices jumped on growing signs of tightness in U.S. markets after Hurricane Ida hit offshore output.

Leading gains on the subindex, Whitehaven Coal added 3.06% and Beach Energy gained 2.48%.

Energy giants Santos and Oil Search also jumped as much as 2.7% and 4.9%, respectively, after the terms of their planned merger were confirmed earlier in the day.

Major miners rose 1.7%, led by Nickel Mines Ltd , up 8.54%, followed by Aurelia Metals Ltd, gaining 7.69%.

Nickel prices leaped to a record high in Shanghai and surpassed a seven-year high in London on upbeat demand and dwindling inventories. Aluminium and copper prices also jumped.

New Zealand’s benchmark S&P/NZX 50 index was largely unchanged, closing the session at 13064.4 points. (Reporting by Riya Sharma in Bengaluru; Editing by Devika Syamnath)