* Bank of Queensland top drag on benchmark

* Tech stocks lead gains in Australia

* a2 Milk top loser in NZ, down 3.8%

Sept 29 (Reuters) - Australian shares rose to their highest level in three weeks on Tuesday, boosted by an overnight rally in global equities, with prospects of virus hotspot Melbourne returning to near normal by Christmas adding to the cheer.

The S&P/ASX 200 index climbed as much as 0.7% in early trade, bouncing from Monday's 0.2% drop.

Global markets surged on Monday in what some analysts called a "relief rally," where investors scooped up cheapened stocks after last week's sharp sell-off.

In Australia, the southeastern Victoria state lifted some of the strictest curbs in its capital of Melbourne, after reporting a single-digit rise in new infections for the first time in three months on Monday.

Among the top percentage gainers on the benchmark were Qantas Airways and Flight Centre Travel Group, both extending gains to hit their highest since June after the extension of a COVID-19 airline relief package.

Meanwhile, Bank of Queensland, down up to 3%, was the top drag on the index after it flagged a $123.8 million hit to its annual earnings, mostly due to COVID-19.

Among sectors, tech stocks led gains and touched their highest in nearly four weeks with Afterpay extending its winning streak to a third session.

Barring gold stocks, all major sub-indexes gained.

In New Zealand, the benchmark S&P/NZX 50 index fell 0.1% to 11,785.71 by 1246 GMT.

Shares of a2 Milk extended losses and slipped up to 3.8% after projecting a grim outlook on Monday, while Air New Zealand, up 3.7%, was among the top boosts.

The airline said on Tuesday it had drawn down NZ$110 million ($72.23 million) of a NZ$900 million government loan facility to date, as it shored up liquidity to help fight the coronavirus crisis. ($1 = 1.5230 New Zealand dollars) (Reporting by Arundhati Dutta in Bengaluru; editing by Uttaresh.V)