Australian shares end week slightly higher, all eyes on rate outlook and labour report

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By Shruti Agarwal

Dec 5 (Reuters) - Australian shares ended a choppy session slightly higher on Friday, supported by gains in miners and banks, while investors stayed cautious ahead of next week’s central bank rate decision and labour market report.

The S&P/ASX 200 index .AXJO rose 0.2% to 8,634.60. The benchmark logged a second straight weekly gain, though up a modest 0.2%.

With markets awaiting central bank decisions and little clear economic or earnings data, investor sentiment lacks a strong anchor in the near term, said Justin Lin, investment analyst at Global X ETFs.

Market participants have fully priced in a hold at the Reserve Bank of Australia's next policy meeting on Tuesday.

After a string of recent economic data showed signs of robust economic growth coupled with persistent inflation, investors are now pricing chances of a rate hike possibly as soon as May.

The labour market report due on Thursday is far more likely to move the dial in terms of investor sentiment, Lin said.

Miners .AXMM rose 0.9% to hit a fresh high for the fourth day in a row, as copper prices remained at record levels. Robust prices for precious and base metals have pushed the sector 33.8% higher year-to-date.

Heavyweights BHP BHP.AX and Fortescue FMG.AX gained 0.8% and 2.2% respectively. However, a 1.5% drop in Rio Tinto RIO.AX capped gains.

Gold stocks .AXGD rose 1.4%, with Evolution Mining EVN.AX adding 2.6%.

Lithium miners Mineral Resources MIN.AX and IGO IGO.AX surged 4.6% and 7.1% respectively after UBS upgraded demand outlook for the battery metal.

Financial stocks .AXFJ added 0.4%, with the big four banks all ending in the green.

Consumer discretionary stocks .AXDJ were the biggest drag on the index, shedding 1.2% as investors braced for a higher interest rate environment, while energy stocks .AXEJ fell 0.6%.

New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.2% to finish at 13,483.99 points.

(Reporting by Shruti Agarwal in Bengaluru; Editing by Nivedita Bhattacharjee)

((Shruti.Agarwal@thomsonreuters.com))