(Updates to close)
By Aaron Saldanha
Oct. 5 (Reuters) - Australian shares ended flat on Thursday, with gains in materials and consumer staple companies offset by selling in financials, while New Zealand's benchmark index hit another record high.
Australian shares were initially in the black as they tracked Wall Street's gains on strong U.S. services data, but they gave up those gains later in the day as traders grew cautious ahead of U.S. non-farm payrolls on Friday. S&P/ASX 200 index .AXJO ended flat at 5,651.80 points. The benchmark slipped 0.9 percent on Wednesday.
BHP Billiton (LON:BLT) BHP.AX gained 0.5 percent while Rio Tinto (LON:RIO) RIO.AX rose 0.8 percent.
Qantas Airways QAN.AX closed up 3.2 percent at a record high and pushed the index up the most.
Gains in materials and consumer staples on the benchmark were largely negated by losses in lenders like Australia and New Zealand Banking Group ANZ.AX and National Australia Bank NAB.AX , which fell over 0.5 percent each and were among the index's biggest drags.
Meanwhile, New Zealand's benchmark S&P/NZX 50 index .NZ50 closed at a record high, gaining 0.3 percent, or 25.01 points, to 7,974.7.
The government reported a higher than expected operating surplus of NZ$4.07 billion, on a day when the political impasse in Wellington seemed to marginally ease as the New Zealand First party started coalition talks with the governing and opposition parties. and telecom stocks propped up the benchmark index. Dairy company A2 Milk ATM.NZ rose 5.7 percent and pushed up the index the most.
Conversely, Auckland Airport AIA.NZ weighed on the index as it fell 2.7 percent, touching its lowest level this year.