(Updates to close)
Feb 3 (Reuters) - Australian shares finished lower on Friday, with the mining index seeing its biggest fall in two months, after the China's central bank unexpectedly raised its short-term interest rates.
The S&P/ASX 200 index .AXJO closed down 0.4 percent, or 23.834 points, to 5,621.6. The index lost 1.6 percent on the week.
The tightening of monetary policy by the People's Bank of China sent a fairly "punchy signal" across bulk commodities, taking miners along for a ride," said Chris Weston, an institutional dealer at IG Markets.
The central bank raised the interest rate on open market operation reverse repurchase agreements (repos) by 10 basis points. ASX metal & mining index .AXMM fell 2.5 percent in heavy trading, with over 251 million shares changing hands, about 1.4 times the 30-day average volume.
Mining giants BHP Billiton (LON:BLT) Ltd BHP.AX and Rio Tinto (LON:RIO) Ltd RIO.AX spearheaded the declines in the broader index, falling by more than 3 percent.
Fortescue Metals Group Ltd FMG.AX also suffered losses, dropping by more than 4 percent.
Also among the decliners was James Hardie Industries PLC JHX.AX , which lost 4.4 percent after weak third quarter results. saw some losses, with ANZ Banking Group shares ANZ.AX down nearly 1 percent and Commonwealth Bank of Australia CBA.AX withering 0.4 percent.
"Financials were down because of China," Weston said.
At the other end, gold stocks rose with Newcrest Mining Ltd NCM.AX up as much as 1.5 percent.
New Zealand's benchmark S&P/NZX 50 index .NZ50 edged up 0.6 percent, or 40.84 points, to 7,094.38. The index fell 0.6 percent on the week, snapping six weeks of gains.
Materials and healthcare stocks led the gains, with Fletcher Building Ltd FBU.NZ and Fisher & Paykel Healthcare Corporation Ltd FPH.NZ rising 1.8 percent and 2.3 percent, respectively.