* Australian benchmark's biggest weekly fall in over two months
* Three of the "big four" banks end lower
* Miners buck trend, hit by fall in ironore prices (Updates to close)
By Nikhil Subba
Dec 6 (Reuters) - Australian shares closed higher on Friday in cautious trade after U.S. President Donald Trump said trade talks with China were "moving right along", capping a see-saw week as hopes for a an agreement rose and fell.
The S&P/ASX 200 index .AXJO closed 0.4% higher at 6,707.00 points. But it fell 2% on the week, its biggest weekly percentage fall since Oct. 4. The benchmark rose 1.2% on Thursday.
Trump's upbeat tone on trade on Thursday was enough to spark buying, even as Chinese officials insisted existing tariffs must be removed as part of an interim deal to defuse the trade war. Earlier in the week, Trump rattled markets by saying a deal might have to wait until after the 2020 U.S. election. new round of U.S. tariffs on Chinese imports is due to take effect on Dec. 15.
"Markets don't expect the next round of tariffs, but are sceptical we will see a phase one deal this side of the Christmas holiday," said Edward Moya, senior market analyst at OANDA.
The heavyweight financial sub-index .AXFJ closed 0.3% higher, though Commonwealth Bank of Australia CBA.AX was the only stock among the "big four" lenders to finish in positive territory.
Healthcare stocks .AXHJ advanced over 1%, helped by index heavyweight CSL Ltd CSL.AX which ended 1.2% higher, and medical technology company Avita Medical Ltd AVH.AX which rose 3.4% at session end.
Oil and gas explorer Beach Energy BPT.AX rose 3.8% while Woodside Petroleum WPL.AX ended 0.5% higher, helping the energy sector .AXEJ finish the session 0.3% higher. The sub-index, however, saw its worst weekly percentage loss in over two months.
Bucking the trend, the mining sector .AXMM slipped 0.2% at close, dragged lower by a fall in ironore prices, while marking its biggest weekly loss in nearly two months.
Iron ore producer Fortescue Metals Group FMG.AX closed 0.6% lower, while the world's largest miner BHP Group BHP.AX slipped 0.1% lower at the end of the session.
Over the Tasman sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 inched up 0.2% or 18.41 points to finish the session at 11,276.20. The New Zealand benchmark clocked in a weekly loss of 0.4%, its biggest percentage fall since the five days ended Oct. 25.
Electricity retailer Mercury NZ Ltd MCY.NZ ended the day with a 3% gain, while agribusiness company Scales Corp SCL.NZ concluded up 1.4%.