Australian shares wipe out early gains as banks drag

*

ASX200 logs weekly gain

*

Banks fall while miners gain

*

NZ50 gains for second straight week

(Updates to market close)

By Nikita Maria Jino

June 27 (Reuters) - Australian shares gave up early gains to close lower on Friday, as losses in heavyweight financials offset a rise in mining stocks, but the benchmark still posted a weekly gain.

The S&P/ASX 200 index ended 0.4% lower to finish the session at 8,514.2 points after rising as much as 0.6% in the early hours of trade.

The benchmark gained 0.1% for the week and was poised to log its third consecutive monthly gain.

Banking stocks fell 1.5% after hitting a fresh peak for the fourth straight session, with the "big four" banks losing between 1.6% and 2.8%. However, the sub-index marked its strongest week in nearly a month.

"Financials have taken a breather after a strong run. This looks like a classic case of profit-taking rather than a shift in fundamentals — banks remain well-supported by stable credit conditions and a resilient domestic economy," said Hebe Chen, market analyst at Vantage Markets.

Healthcare stocks also fell 1.4%, with biotech firm CSL losing 2%. The sub-index lost 1.5% for the week, its weakest since early May.

"As appetite for defensives fades and investors rotate into more cyclical names, CSL's lackluster performance continues to deter any meaningful dip-buying," Chen said.

Real estate stocks fell 1.2%, while the industrial sector was down 0.7%.

Bucking the trend, heavyweight mining stocks rose 2.5% and posted their strongest session since April 10. The sub-index rose 0.3% for the week, its best weekly performance in more than a month.

Dalian iron ore futures rose and were poised for a weekly gain on falling iron ore and steel inventories.

Sector giant BHP rose 3.9%, closing at its highest level since June 12. Rio Tinto and Fortescue added 4.6% and 3.6%, respectively, on the day.

New Zealand's benchmark S&P/NZX 50 index closed the session 0.8% higher at 12,583.59 points, extending gains for the week. (Reporting by Nikita Maria Jino in Bengaluru; Editing by Vijay Kishore)