Updates to market close

By Nikita Maria Jino

Nov 29 (Reuters) - Australian shares ended marginally lower on Friday, weighed by heavyweight financials after major local banks pushed back their interest rate cut expectations to May, while gains in miners mostly offset the decline.

The S&P/ASX 200 index .AXJO slipped by 0.1% to 8,436.2 points. For the month, the benchmark rose 3.4%, its best since July.

ANZ Group ANZ.AX, financial advisor AMP AMP.AX and Bank of Queensland BOQ.AX said they expect the Reserve Bank of Australia to start easing rates from May as underlying inflation remains well above the central bank's target range.

RBA Governor Michele Bullock in a speech on Thursday said core inflation was too high to allow for rate cuts in the near term.

Higher-for-longer rates, while historically beneficial to banks, are slowing their credit growth and impacting borrowers' mortgage paying capacity.

Banking stocks .AXFJ fell 0.3%, with the Commonwealth Bank of Australia CBA.AX ending flat and other three of the "big four" banks down between 0.1% and 1.1%. The financial sector has rallied by 33.8% this year, which has fueled concerns of their valuations.

Analysts at Morningstar in a note said the Australian banking sector has abundant and intensifying competition, though valuations of major lenders look stretched.

"The steadiness and somewhat improving outlook for the Australian economy may have helped banks in the near term, but the outlook for rates to be on hold from the RBA well into 2025 means that there will be greater scrutiny on housing market leverage," said Kerry Craig, global market strategist at JPMorgan.

The mining index .AXMM rose by 1% but declined by 4% this month. "The outlook for increasing tariffs and further impingement on Chinese growth is a headwind to the resource sector," said Craig.

BHP BHP.AX and Fortescue FMG.AX rose by 1.3% and 1.6% respectively.

The healthcare index .AXHJ fell 0.4%, snapping a five-session winning streak. CSL CSL.AX, one of the country's priciest stocks, dropped by 1%.

In New Zealand, the S&P/NZX 50 index .NZ50 closed flat at 13,066.92 points.

(Reporting by Nikita Maria Jino in Bengaluru; Editing by Varun H K)

((Nikita.Jino@thomsonreuters.com;))