* Energy stocks gain 1 percent
* Investor's await RBA quarterly economic outlook
By Shreya Mariam Job
May 10 (Reuters) - Australian shares traded sideways on Friday as investors waited to see if trade negotiators from China and U.S. meeting in Washington for a second and final day could salvage a deal to end their countries near year-long tariff war.
The S&P/ASX 200 index .AXJO was flat at 6,296.8 by 0125 GMT. The benchmark rose 0.4 percent on Thursday.
Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin talked for 90 minutes on Thursday and were expected to resume talks on Friday. Officials did not speak to reporters as they left the talks. think the markets will be aimless in the short term. It will be a holding pattern till we get clarity on the trade war and we have the federal election next week. I don't think people will take big bets going into the weekend," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.
Australians will go to the polls on May 18, in an election where the main issues include taxation, climate change and inequality.
Opinion polls have had center-left Labor well ahead and show that the coalition of Prime Minister Scott Morrison's Liberals and the rural-focused Nationals party are headed for a resounding defeat.
A 1 percent gain in the Aussie energy subindex was boosted by shares of Woodside Petroleum WPL.AX and Santos STO.AX rising 1.4 percent and 1.2 percent, respectively .
U.S. oil prices rose on Friday on renewed optimism that a trade deal between Washington and Beijing could be struck, as investors have been fearing that a protracted tariff war would harm global economic growth. O/R
Metal and mining stocks climbed 0.5 percent. Top miner BHP Group BHP.AX gained 0.1 percent, while peer Rio Tinto (LON:RIO) RIO.AX rose 1.2 percent.
Separately, shares of smaller miner Aurelia Metals AMI.AX gained 2.3 percent after it said on Thursday that it was no longer in talks about a possible acquisition of the CSA mine in New South Wales, backing off from plans to buy the Glencore (LON:GLEN) Plcowned copper mine. were broad based with the financial index .AXFJ slipping 0.3 percent. The top banks Commonwealth Bank of Australia CBA.AX and Australia and New Zealand Banking Group ANZ.AX logged a 0.2 percent and 0.6 percent decline.
The country's central bank on Friday indicated that it will consider lowering interest rates if unemployment does not fall further, but downgraded its forecasts for both growth and inflation. stocks also dipped 0.3 percent with biotherapeutics company CSL Ltd CSL.AX shedding 0.6 percent.
New Zealand's benchmark S&P/NZX 50 index .NZ50 was little changed rising 0.02 percent or 2.13 points to 10,106.22.
Shares of Auckland International Airport AIA.NZ gained more than 1 percent, while NZ-listed shares of A2 Milk Company ATM.NZ dropped 0.8 percent.