* Earlier losses among financials drag benchmark to weekly loss
* Financials mark 2nd session of gains
* NZ down 1.5 pct this week (Updates to close)
By Nikhil Nainan
Oct 5 (Reuters) - Australian shares edged higher on Friday, supported by gains from the scandal-hit financial sector which managed to advance for a second session, but not enough to stop the benchmark from a weekly loss.
The S&P/ASX 200 index .AXJO closed 0.2 percent higher at 6,185.5. The benchmark is off 0.4 percent for the week, despite gaining over the last two sessions, including a 0.5 percent rise on Thursday.
Financial stocks .AXFJ rose 0.4 percent, though for the week the index lost 1.4 percent, reflecting relentless pressure after a months-long inquiry revealed widespread misconduct in the sector. country's number two lender Westpac Banking Corp WBC.AX rose 0.5 percent, while National Australia Bank NAB.AX inched 0.2 percent lower.
"Given the risks involved, the share prices have fallen to levels where in relation, the dividend yields are quite enticing to investors for banks," said McCarthy, referring to the risks posed by the Royal Commission outcomes.
"Banks have dividend yields of 8-10 percent currently and interest rates close to 2 pct, some investors will see that as attractive."
Elsewhere, Wesfarmers WES.AX received court approval for a shareholder vote on the spin-off of its supermarket chain, Coles. The conglomerates shares, which were on a trading halt prior to the announcement, closed marginally higher.
Material stocks .AXMM , which have lacked some direction this week due to markets being closed in resource-hungry China, inched 0.1 percent higher.
Rare-earth minerals miner Lynas Corp LYC.AX closed up 10 percent after the chief of an environmental review into the company's Malaysian plant was quoted as sounding more conciliatory than previously. that the newly-elected government could close down Lynas' plant sent shares skidding 27 percent last month.
In the energy space, Beach Energy BPT.AX closed down 3.7 percent, its lowest in over a week as the firm cut its fiscal year 2019 production and core earnings guidance. Zealand's benchmark S&P/NZX 50 index .NZ50 dropped 0.5 percent or 42.31 points to finish at 9,214.87.
The benchmark lost 1.5 percent for the week.
Synlait Milk SML.NZ fell 5.7 percent, with index heavyweights Air New Zealand AIR.NZ and a2 Milk Company ATM.NZ down 1.7 percent and 1 percent, respectively.