News: NAB Australia shares rebound, set for weekly gain; NZ more subdued

SYDNEY/WELLINGTON, May 20 (Reuters) - Australian shares staged a modest rebound on Friday after two sessions of declines led by gains in the mining sector and some of the major banks, setting the market on track to end the week a touch higher.

The S&P/ASX 200 index (xjo) rose 0.5 percent, or 26.2 points, to 5,349.5 by 0237 GMT, helping the benchmark turn positive for the week with a 0.4 percent rise.

"If we continue to see steady buying in financials and the materials and energy sectors hold up, the ASX could finish the final session for the week in positive territory," said Angus Nicholson, market analyst at IG.

Mining giant BHP Billiton (BHP) rose 1.6 percent, while Rio Tinto (RIO) put on 2.0 percent. The big banks were slightly higher except for National Australia Bank (NAB) which eased 0.4 percent.

Shares in Oil Search (OSH) rose 2.5 percent after the oil and gas explorer agreed a $2.2 billion deal to acquire InterOil Corp in a move that could pave the way for two rival liquefied natural gas projects led by global majors to work together in Papua New Guinea.

New Zealand's benchmark S&P/NZX 50 index (nz50) was just a touch softer at 6,900.9, remaining below a record high of 6,988.4 set on Tuesday.

The benchmark was headed for a weekly loss of 0.2 percent. Ryman Healthcare (RYM) shed 0.2 percent after the retirement village operator's full-year results failed to impress investors.

Casino operator Sky City (SKC) fell 2.7 percent and New Zealand Refining (NZR) lost 3.1 percent.

Infratil (IFT) rose 0.6 percent after the infrastructure company announced a NZ$100 million bond offer.