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By Sherin Sunny

May 22 (Reuters) - Australian shares ended lower on Thursday, dragged down by banks and consumer stocks, while weak domestic economic data and mounting global uncertainties kept risk appetite in check.

The S&P/ASX 200 index .AXJO fell 0.5% to 8,348.70, retreating from the more than three-month peak touched on Wednesday.

Investors grew cautious after estimates showed U.S. President Donald Trump's proposed tax cuts could add $3.8 trillion to America's debt, while Australia's May composite Purchasing Manager's Index fell to 50.6 from 51 a month ago.

"The darkening local economic outlook, reinforced by today's three-month-low PMI reading, coupled with mounting instability in global capital markets, has effectively triggered a wave of profit-taking," said Hebe Chen, a market analyst at Vantage Markets.

Financials .AXFJ declined 0.8%, with three of the "Big Four" banks losing between 0.7% and 1.3%, while ANZ Group ANZ.AX recovered earlier losses to finish flat.

The sub-index reversed the gains made in the last two sessions on the back of the Reserve Bank of Australia's $(RBA)$ 25-basis-point interest rate cut to a two-year low of 3.85%.

Real estate .AXRE, consumer discretionary .AXDJ and technology stocks .AXIJ followed suit, falling 0.7%, 1.1% and 1.6%, respectively.

Miners .AXMM lent some support, gaining 0.7%, as iron ore prices rose on steady Chinese demand. IRONORE/

Gold stocks .AXGD jumped 3.3% to a one-month closing high as investors flocked to the safe-haven asset amid concerns over U.S. debt. GOL/

Genesis Minerals GMD.AX and Northern Star Resources NST.AX advanced 5.8% and 5.4%, respectively, and were among the top gainers on the benchmark.

New Zealand's blue-chip S&P/NZX 50 index .NZ50 ended 0.3% at 12,662.25.

The country set its new spending for the current fiscal year at a decade low, after warning of softer GDP growth and a "trade shock" to the economy from the global tariff war.

The Reserve Bank of New Zealand will announce its cash rate next Wednesday.

(Reporting by Sherin Sunny in Bengaluru; Editing by Sumana Nandy)

((Sherin.Sunny@thomsonreuters.com))

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