Updates to close

By John Biju

May 31 (Reuters) -Australian shares closed 1% higher on Friday, helped by gains in financial and commodity stocks, as softer U.S. economic growth data raised hopes that interest rate cuts are still on the table this year.

The S&P/ASX 200 index .AXJO rose 1.0% to 7,701.7 points at the close of trade snapping a three-session slide. The benchmark rose 0.5% for the month.

Data on Thursday showed the world's biggest economy grew more slowly than expected in the first quarter after downward revisions to consumer spending.

Markets are expecting a 51% of the Federal Reserve cutting interest rates in September, compared to 47% ahead of the GDP data, according to the CME FedWatch Tool.

"It looks like markets have found some confidence after U.S. economic growth fell sharply in Q1 and naturally expected rate cuts be back on the table soon. The key focus remains in the PCE reading tonight," said Glenn Yin, head of research and analysis at AETOS Capital.

The U.S. Personal Consumption Expenditures (PCE) price index data, the Federal Reserve's preferred inflation measure, will help investors gauge if high rates have done enough to curb prices and keep rate cuts on the table for the year.

"For the Aussie market, facing the possibility of another rate hike, developments in the U.S. could offer some much-needed relief," said Hebe Chen, a market analyst at IG Markets.

In Sydney, commodity stocks advanced, with mining stocks .AXMM jumping 0.9%, gold .AXGD climbing 2.8% and energy .AXEJ gaining more than 1%.

Mining stocks posted their third month of consecutive gains.

Heavyweight financial stocks .AXFJ climbed 1.0% with the 'big four' banks gaining between 0.2% and 1.3%.

Healthcare stocks .AXHJ and consumer staples .AXSJ jumped more than 1% each.

New Zealand's benchmark S&P/NZX 50 index .NZ50 closed 2.7% higher at 11,867.29 points, hitting their highest level since early May.

The country's government delivered modest tax relief and lowered new spending in its budget.

Reporting by John Biju in Bengaluru; Editing by Varun H K

For more information on DIARIES & DATA:
U.S. earnings diary RESF/US
Wall Street Week Ahead .N/O
Global Economy Week Ahead DATA/
................................................................
For latest top breaking news across all markets NEWS1