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By Rajasik Mukherjee

Aug 28 (Reuters) -Australian shares ended flat on Wednesday as gains in banking stocks were offset by losses in commodities, while domestic inflation slowed to a four-month low in July.

The S&P/ASX 200 index .AXJO closed at 8,071.4 points. The benchmark settled 0.2% lower on Tuesday.

Australia's consumer price index (CPI) rose at an annual pace of 3.5% in July, down from 3.8% in June.

The figure was slightly above forecasts of 3.4%, leading markets to slightly lengthen the odds of a first easing from the Reserve Bank of Australia in November to 48.4% from 58% earlier.

Meanwhile, heavyweight miners .AXMM fell 1.1% as investors turned cautious ahead of data that will show whether steel demand in top consumer China is recovering.

Top miner Fortescue FMG.AX fell 1% despite reporting a higher annual profit.

"We are moving into overall weak market cycle into September, and miners are unable to hold recent bounce with weak outlook for steel and iron ore," Mathan Somasundaram, CEO of Deep Data Analytics, said.

Energy stocks .AXEJ shed 1.4%, weighed down by a 0.7% loss in Santos STO.AX and 1.2% fall in Woodside Energy WDS.AX.

Global oil prices were also under pressure as fears of reduced demand for energy worried traders. O/R

In contrast, rate-sensitive financials .AXFJ ended 0.8% higher. Westpac Banking Corp WBC.AX was the top gainer among the "Big Four" lenders, rising 1.1%.

Among individual stocks, retailer Woolworths WOW.AX gained 3.3% after announcing a special dividend, while miner Lynas LYC.AX rose 3.4% after posting a smaller-than-expected drop in annual profit.

Wagering firm Tabcorp TAH.AX shed 15% as it swung to a full-year loss.

Australia's earnings season is at its fag end, with top companies like BHP Group and Woodside Energy WDS.AX having reported their results earlier this week.

"Investors are a bit scared as volatility has been high during reporting season. Stocks that beat expectations are up 5-10% while missing gets you 15-20% drop," Deep Data Analystics' Somasundaram said.

New Zealand's benchmark S&P/NZX 50 index .NZ50 ended up 0.2% at 12,470.6 points.

Reporting by Rajasik Mukherjee in Bengaluru; Editing by Sonia Cheema

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