Australian shares track Wall St higher on economic recovery hopes

June 22 (Reuters) - Australian shares were set for their biggest gain in nearly three months on Tuesday, tracking an overnight rally on Wall Street, as investors snapped up value stocks that are expected to outperform along with an economic recovery.

The S&P/ASX 200 index rose 1.2% to 7,322.20 by 0114 GMT, on track for its best day since March 31.

Elsewhere, Japan’s Nikkei added 2.4% and S&P 500 E-minis futures were up 0.1%.

U.S. stocks jumped on Monday as investors bought into beaten-down value stocks, in a stark reversal from last week when the Fed’s hawkish signals on monetary policy sparked a round of steep profit-taking.

Among individual shares and sectors, energy stocks advanced 1.7% and were set to snap a three-day losing streak. Heavyweight Santos added 2.8%.

Financials gained 1.7%, with the so-called “Big Four” banks adding between 1.1% and 2.4%.

Heavyweight miners climbed 1.6%, with BHP and Rio Tinto rising 2.1% and 1.8%, respectively.

Brokerage UBS, however, downgraded Rio Tinto’s stock to “sell” despite strong current free cash flow and expected shareholder returns, as it expects a hit to iron ore prices from a hawkish Fed and tighter Chinese control on commodity prices.

The gold subindex climbed as much as 2%, eyeing its best day since June 11.

Gold miner IGO was the ASX200’s top gainer, after it said regulatory requirements for the internal restructure of the Australian arm of China’s Tianqi Lithium to proceed were now satisfied. IGO plans to invest A$1.4 billion into the local unit.

Investment firm Washington H. Soul Pattinson and Co Ltd said it would buy peer Milton for A$4.05 billion, sending the latter’s shares up nearly 17%.

New Zealand’s benchmark S&P/NZX 50 index rose 0.4% at 12,544.65. ($1 = 1.3280 Australian dollars) (Reporting by Vasudha Kaukuntla in Bengaluru; editing by Uttaresh.V)