Australian shares closed flat on Thursday after two sessions of sharp gains, as gains in energy stocks on the back of strong crude prices were offset by losses in banks.

The S&P/ASX 200 closed little changed at 6,817.50, also weighed down by recession fears. The index gained 5.6% in the previous two sessions after the country's central bank delivered a smaller-than-expected interest rate hike.

Hopes of a slowdown or pause in the U.S. Federal Reserve's tightening pace dwindled after data showed strong labour demand again, weighing on investor sentiment.

"For now, the major theme playing is the macroeconomic landscape, with investors looking closely at the RBA (Reserve Bank of Australia), the Fed, and data on inflation, jobs and wage growth," said Kunal Sawhney, chief executive officer of Kalkine Group.

Sawhney said the recent rally seen in ASX 200 was "yet to translate into a consistent growth in the value of stocks, which makes this a wait-and-watch game, with little predictability on what is coming next."

Fund manager Magellan Financial Group was the top loser on the local bourse as the stock slumped 8.4% to an eight-year low on higher outflows in the September quarter.

Financials declined 0.4% after gaining about 6.6% in the last two sessions. Australia's "big four" banks fell between 0.4% and 1%.

Meanwhile, miners rose 0.6% and hit a three-week high. Sector heavyweights BHP Group and Rio Tinto rose 0.6% and 0.2%, respectively, while Fortescue Metals Group eased 0.1%.

Energy stocks climbed 2.2%, hitting their highest in nearly a month on the back of rising oil prices. The sub-index rose for an eight consecutive session. Woodside Energy and Santos advanced 2.6% and 1.8%, respectively.

In New Zealand, the benchmark S&P/NZX 50 closed 0.5% lower at 11,125.24. Dairy firm a2 Milk was among the top decliners. (Reporting by Upasana Singh in Bengaluru; Editing by Subhranshu Sahu)