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By Sherin Sunny

Oct 4 (Reuters) -Australian shares ended at their lowest in more than a week on Friday, weighed by miners and financials, as the escalating tensions in the Middle East dampened risk sentiment.

The S&P/ASX 200 index .AXJO fell as much as 1.2% before recouping some losses to end the day 0.7% lower at 8,150 points, its lowest close since Sept. 25. It has lost 0.8% this week.

The benchmark hit a record high on Monday before retreating over the rest of the week as strong domestic retail sales doused hopes of a rate cut and the conflict in the Middle East escalated.

"For the (central bank), this week's retail sales data has complicated the challenge ahead, not only making the 2024 rate cut highly unlikely now, but even possibly bringing further hikes back," said IG market analyst Hebe Chen.

On the day, miners .AXMM retreated 1.3% as copper prices fell, with sector majors BHP Group BHP.AX, Rio Tinto RIO.AX and Fortescue FMG.AX slipping between 1.1% and 1.9%. MET/L

Financial stocks .AXFJ fell 1% to their lowest close since Aug. 15, with the "Big Four" banks shedding between 1.4% and 1.9%.

The bright spot was energy stocks .AXEJ, which ended 1.8% higher as the Middle East conflict sparked worries of supply disruption. O/R

The sub-index gained 6.7% this week, marking its best week since early October 2022.

"The eye-catching rally in energy stocks, primarily driven by surging oil prices, is likely to extend its next leg should the Middle East conflict continue to escalate," said Chen.

Gold stocks .AXGD ended 0.8% higher, supported by safe-haven demand for the bullion. GOL/

New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.4% to finish the session at 12,619.94 points.

The Reserve Bank of New Zealand will likely cut rates by 50 basis points to 4.75% next week, a Reuters poll showed.

Reporting by Sherin Sunny in Bengaluru; Editing by Savio D'Souza

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