* Higher iron prices push Rio, Fortescue up
* Gold stocks fall on prices
* Aussie benchmark set for over 1 pct weekly gain
By Aby Jose Koilparambil
April 12 (Reuters) - Australian shares advanced on Friday, outperforming regional markets as higher iron ore prices supported large miners such as Rio Tinto and Fortescue Metals Group.
The S&P/ASX 200 index gained 0.7 percent to 6,244.80 by 0110 GMT, bouncing back from a 0.4 percent decline on Thursday.
The benchmark is on track to add more than 1 percent for the week, with gains in mining stocks fuelling weekly advance.
The broader market also found support from firm U.S. economic data. U.S. initial jobless claims for last week dropped to their lowest level since 1969, while in March, producer prices made their biggest gain since October.
“The positive data and strong treasury yields in U.S. point towards potentially better outlook for both inflation and rate cycle,” said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities. “These factors are good for the banks and that is flowing into the financial sector.”
The benchmark gains were powered by financials, with the Big Four banks rising between 0.9 percent and 1.5 percent.
Somasundaram said he expected the Australian market to be choppy in the near short-term but would go higher in the context of cheap valuations.
China’s steel and iron ore futures closed higher on Thursday, resuming their climb after a one-day pause and supported by expectations of higher demand.
Index heavyweights BHP Group and Rio Tinto gained 0.5 percent and 0.8 percent, respectively, while Fortescue, the world’s fourth largest iron ore miner, put on 1.2 percent.
The metals and mining sub-index is set to advance 0.5 percent for the week, its fifth consecutive weekly gain, however, on the day, the sub-index was flat with gains capped by weaker gold stocks.
Gold prices fell more than one percent, slipping below the key $1,300 level, as robust economic data from the United States boosted the dollar, taking the sheen off the safe-haven metal.
Gold firms accounted for the top five losers of the metals sub-index.
Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index was little changed.
Retirement village operator Summerset Group Holdings Ltd was among the top percentage gainers on the benchmark, adding about 2 percent while flag carrier Air New Zealand was among the top decliners, shedding as much as about 2 percent. (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Sam Holmes)