* Banks led the falls
* Investors await key U.S. data
* 74 shares up, 108 down and 18 unchanged (Adds analysis, quotes, stocks on the move)
By Pauline Askin and Cecile Lefort
SYDNEY/WELLINGTON, Oct 2 (Reuters) - Australian shares slipped 0.5 percent on Friday after two days of gains as investors took profits ahead of the release, later in the global day, of U.S. non-farm payrolls data, which might provide some clue to when U.S. interest rates will rise.
The S&P/ASX 200 index .AXJO fell 25.6 points to 5,086.5 by 02:17 GMT. The benchmark rose 1.8 percent on Thursday and is on track for its first weekly gain in two weeks.
"It's been a hectic and an exhausting week for investors and traders. A bit of a breather not only makes sense in the context of the week but also in view of the fact that we've got a potentially market-changing read on U.S. nonfarm payrolls coming out tonight, Michael McCarthy, chief market strategist, CMC Markets.
The index posted its biggest quarterly loss in four years for the three months to September. The market's recent rout has forced most strategists to slash their year-end expectations, but a new Reuters poll shows the index is still seen ending 2015 roughly 2 percent above Thursday's close. ID:nL4N11O14O
Banks weighed on the index with Westpac WBC.AX and ANZ ANZ.AX down over 1 percent each, Commonwealth Bank CBA.AX fell 0.7 percent and NAB NAB.AX was off 0.2 percent.
Energy stocks were mixed with Woodside Petroleum WPL.AX down 0.4 percent while Santos STO.AX rose 0.6 percent.
Miners seesawed between black and red with miner Fortescue Group FMG.AX rising 1.5 percent while Rio Tinto (LONDON:RIO) RIO.AX fell 1.7 percent.
Australia's Bega Cheese Ltd BGA.AX rose as much as 1.3 percent after brokerage Bell Potter raised its target. ID:nL3N1220AP
China's markets are closed until October 8.
Asian shares slipped in early trade, with MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS down about 0.3 percent. Wall Street ended slightly higher.
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New Zealand's benchmark NZX 50 index .NZ50 rose 0.2 percent, or 10.7 points, to 5,596.167, not far from a one-month trough touched in the last session.
The index was on track for a decline of around 2 percent this week, with charts pointing to further downside. A sustained break of 5,585.54 would target 5,541.56, the 100 percent retracement of the September climb.
Petrol retailer Z Energy Ltd ZEL.NZ finally bounced after a tough week. It was up 1.5 percent but still down around 9 percent for the week after New Zealand's state-run pension fund and utilities investor Infratil IFT.NZ sold a combined 30 percent stake in the firm this week.
In contrast, shares in telco Spark SPK.NZ slipped 0.7 percent to languish at around five-week lows. (Editing by Simon Cameron-Moore)