* Gains led by banks
* Energy sector down
* Market set for weekly loss (Adds analysis, quotes, stocks on the move)
By Charlotte Greenfield and Gyles Beckford
SYDNEY/WELLINGTON, Aug 14 (Reuters) - Australian shares rose 0.12 percent on Friday as the market continued to stabilise after the shock devaluation of the yuan, but the benchmark was still on track for a weekly loss.
The S&P/ASX 200 index .AXJO edged up 6.732 points to 5394.600 by 0135 GMT and was headed for weekly losses of 1.3 percent. The benchmark inched up 0.1 percent on Thursday.
Support came from the People's Bank of China (PBOC) reassuring investors on Thursday by saying there was no reason for the yuan to fall further given the country's strong economic fundamentals. ID:nL5N10O04H
The PBOC had previously shocked markets around the world by setting its yuan exchange rate nearly 2 percent lower on Tuesday.
China is Australia's largest trading partner, making its economy particularly sensitive to news from China.
"Today we're seeing Renminbi (yuan) appreciation. It's marginally appreciating, but it's not depreciating, so that's given some confidence to our market," said Damien Boey, equity strategist at Credit Suisse (SIX:CSGN).
The PBOC set the midpoint rate CNY=SAEC for the Chinese Yuan Renminbi at 6.3975 per dollar prior to market open, firmer than the previous day's close of 6.399. ID:nZZN2WIV00
The financial sector led stock market gains with Westpac WBC.AX up 0.57 percent and NAB NAB.AX up 0.63 percent, while ANZ ANZ.AX was flat.
The energy sector suffered as global oil prices remained under pressure. Oil Search OSH.AX dropped 4.2 percent while Origin Energy ORG.AX was down 2.6 percent.
Cogstate Ltd CGS.AX , a cognitive test developer, rose as much as 11.6 percent after announcing the company had been selected to provide services in two clinical trials. ID:nL3N10P037
Shares in agribusiness company Elders Ltd ELD.AX rose as much as 7.96 percent after it said it would acquire up to $30 million of Elders hybrids ELDPA.AX . ID:nL3N10P0MN
News Corp (NASDAQ:NWSA) NWS.AX was up as much as 3.9 percent after the media company announced strong Q4 results. ID:nL3N10N5YL
For more individual stocks activity click on STXBZ
New Zealand stocks rose for the first time in seven sessions with the benchmark NZX50 share index .NZ50 up 0.3 percent to 5,752.83, as it climbed away from a one-month low touched the previous day.
Investors hand-picked stocks that had been battered over the past week for example Fletcher Building FBU.NZ which was up 1.2 percent - recovering from the 2 1/2-year low touched on Thursday.
Casino company Sky City Entertainment SKC.NZ , which reported an improved annual result earlier this week, while Fisher & Paykel Healthcare FPH.NZ was also firmer.
Chemical and resins manufacturer Nuplex NPX.NZ was up 1.7 percent after reporting a solid lift in its full year profit, raising its dividend, and stating it expected to see modest growth in the coming year. ID:nL3N10L1Q7
Next week sees a run of company earnings, including reports from most of the leading stocks.