* Aussie, NZ benchmark rise for second week in a row
* Australia to defer banking inquiry recommendations for 6 months
* Jump in iron ore prices boosts miners (Updates to close)
By Nikhil Subba
May 8 (Reuters) - Australian stocks ended higher on Friday, marking their second straight weekly gain, after the government unveiled plans to end most coronavirus restrictions by July and as talks between U.S. and Chinese trade officials lifted sentiment.
The S&P/ASX 200 index .AXJO settled 0.5% higher at 5,391.1. The benchmark climbed nearly 3% this week, its biggest weekly rise since April 10.
Mining stocks .AXMM underpinned the gains on Friday as Chinese iron ore prices scaled a nine-month peak. Fortescue Metals Group Ltd FMG.AX , the world's no.4 iron ore miner, jumped 5.5% - the most in more than a month.
"Australia, being a net exporter, performs better when economic activity is thriving and positive trade is a good sign for economic activity," said James Tao, market analyst at CommSec.
Top U.S. and Chinese trade representatives discussed their Phase 1 trade deal earlier in the day, with China - Australia's largest trading partner - saying it would work with Washington to improve the atmosphere for implementing the Phase 1 trade deal signed this year. hopes for an economic recovery at home got a boost from Prime Minister Scott Morrison's plan to ease social distancing restrictions in a three-step process, which would remove all curbs by July and get nearly 1 million people back to work amid a decline in coronavirus cases. financial index .AXFJ closed nearly 1% higher, as it got some relief after the government said it would defer by six months the implementation of recommendations in an inquiry that revealed widespread misconduct in the sector. lender Commonwealth Bank of Australia CBA.AX finished 0.6% higher, while Macquarie Group MQG.AX surged 5.7% as investors shrugged off the investment conglomerate's move to halve its dividend and pull annual forecasts. oil prices fuelled gains in the energy sector .AXEJ , which firmed 0.7% and notched its second straight weekly gain.
Santos STO.AX , the country's second-largest independent gas producer, settled 1.9% higher, while Cooper Energy COE.AX added 1.3%.
In New Zealand, the benchmark S&P/NZX 50 index .NZ50 finished 0.4% higher at 10,695.59. The New Zealand benchmark rose about 2.4% this week, its second straight weekly rise.
Sky Network Television SKT.NZ was the top gainer, closing 6.7% higher, followed by Tourism Holdings THL.NZ , which advanced nearly 6%.