* ASX200 reverses earlier falls to add 0.3 pct
* Financials lead, but gains dampened as U.S. & Europeanstocks fell overnight (Adds analysis, quotes, stocks on the move)
By Thuy Ong and Gyles Beckford
SYDNEY/WELLINGTON, July 11 (Reuters) - Australian sharesadded 0.3 percent on Friday underpinned by the banking sector,but sentiment was subdued in cautious trade as Wall Street andEuropean stocks ended lower on concerns over the fallout fromtroubles at Portugal's top listed bank.
The financials reversed early losses to trade higher withCommonwealth Bank of Australia (Other OTC: CBAUF - news) , the top bank by marketcapitalisation, added 0.3 percent, Australia and New ZealandBanking Corp rose 0.6 percent and National Australia Bank, the country's top lender by assets, inched 0.3 percenthigher.
Sentiment on the local market was dampened as European andU.S. stock markets fell as investors fears over financialtroubles at the family-owned holding companies behind Portugal'sBanco Espirito Santo spilled across borders andmarkets.
"In these times, investors need to remain focused on firmswith strong balance sheets as these tend to outperform duringharder times," said Matt Sherwood, head of investment marketsresearch in a note to clients.
"Investors will pay a higher premium for the safety of lowlygeared balance sheets."
The S&P/ASX 200 index added 18.9 points to 5,483.3by 0152 GMT. The benchmark eked out a gain of 0.2 percent onThursday and is on track to fall 0.8 percent for the week, whichwould be its largest one-week fall since early June.
Gold miners ticked higher after bullion surged to 3-1/2month highs on safe-haven buying. Northern Star Resources Ltd was top gainer on the ASX 200, bouncing 5.7 percent toall-time highs of A$1.67. Evolution Mining Ltd climbed4.9 percent.
The benchmark hit a near six-year peak of 5,554.5 on April29, but has mostly shuffled sideways since then as investorsturned cautious over geopolitical tensions in Iraq and Ukraine.
Among iron ore and steel miners, Fortescue Metals Group Ltd dropped 1.2 percent after failing to meet its full-yearexport guidance. Bluescope Steel Ltd declined 1.6 percent.
Roc Oil Co Ltd jumped 3.1 percent after receiving asecond takeover offer from an undisclosed source.
Strike Energy Ltd soared 4.2 percent after sayingit will continue looking at ways to sell remaining elements ofits U.S. operations.
The New Zealand sharemarket returned to its losing ways,reflecting the reduced appetite, with the benchmark NZX-50 index down 26.9 points or 0.5 percent to 5,101.03, back aroundtwo-week lows.
The overall weaker tone was driven by leading stocks, withcasino operator Sky City Entertainment Ltd (NZSE: SKC.NZ - news) down 2.1percent to NZ$3.73, around a four-and-a-half month low, and paytelevision operator Sky TV Ltd falling 1.8 percent toNZ$6.40.
Software (Xetra: 330400 - news) company Xero Ltd continued a now-familiarroller coaster performance down 2.5 percent at NZ$25.00, whichhas been a support level for the past three weeks. (Reporting by Thuy Ong; Editing by Eric Meijer)
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