* Australian shares up 1.4% this week, best since late-Aug
* Commodity, oil prices support local sectors (Updates to close)
Oct 11 (Reuters) - Australian shares ended higher on Friday, notching their best weekly gain since late August, as encouraging signs from U.S.-China trade talks stirred hopes that a trade deal may be reached.
The S&P/ASX 200 index firmed 0.9% or 59.7 points to 6,606.8.
The improved sentiment came after U.S. President Donald Trump characterised talks between top U.S. and Chinese negotiators as “very, very good.”
His comments backed a similar tone from a White House official, who said the talks had gone “better than expected” and as a U.S. Chamber of Commerce official raised the possibility of a currency agreement this week.
The benchmark posted a weekly gain of 1.4%, albeit in low volumes as the unpredictable nature of the of the tit-for-tat trade war kept investors from making major bets. Weekly volumes were at their lowest since late April.
Financial stocks helped drive much of the gains on Friday, with Macquarie Group rising 2.2%.
The “Big Four” advanced between 0.6% and 1.1%.
Hopes of a trade deal also lifted commodities and oil prices, propping up Australia’s energy and mining stocks.
Fortescue Metals Group gained the most among its major peers, up 4.1%, as the world’s no.4 iron-ore miner extended its share buyback program for further 12 months.
Global miners BHP Group and Rio Tinto climbed 2.1% and 2.3%, respectively.
The improvement in risk sentiment reduced the sheen of gold miners, which were among the top losers on the benchmark.
Australia’s top gold miner Newcrest Mining gave up 1.5%.
Elsewhere, packaging maker Orora Ltd closed 2.3% lower, a day after the company surged on news that it would sell its local fibre materials business for A$1.72 billion ($1.17 billion).
Analysts expressed concern over the company’s exposure to North America if the deal goes through.
In New Zealand, the benchmark S&P/NZX 50 index rose 0.3% to finish the session at 10,923.71. The benchmark advanced for a third straight week.
Diary firm a2 Milk Company rose 2.3% and was among the top boosts. ($1 = 1.4751 Australian dollars) (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Aditya Soni)