Australia shares up as data points to no interest rate rise

* Banks, miners pull up ASX

* Inflation cools in August

* Low rates mean dividends pay more than cash (Adds analysis, quotes, stocks on the move)

By Byron Kaye and Gyles Beckford

SYDNEY/WELLINGTON, Sept 1 (Reuters) - Australian shares posted modest gains on Monday, with financial and resources stocks pulling up the benchmark index as investors took a positive lead from Wall St and soft economic data fed expectations that interest rates will stay low indefinitely.

As investors digested a mixed earnings season in the past two weeks, a gauge of Australian price pressures showed consumer price inflation at its lowest in seven months in August, adding to predictions of no rate rise when the central bank board meets on Tuesday.

New figures from the Australian Bureau of Statistics showed Australian companies posted a 6.9 percent fall in gross profit for the second quarter, adding to long term rates forecasts.

The benchmark S&P ASX 200 index was up 0.3 percent or 18.11 points at 5644.00 points, within eight points of the record high it reached on Aug. 27.

"Everybody's realising that the low interest rate environment, which they've been trying to call the end of for six to 12 months, looks like it's going to persist," said Chris Kimber, managing director of Kimber Capital.

"There's a whole group of people who have been in too much cash that start buying because they're afraid of missing out on ex-dividend season."

United States stocks on Friday ended a strong month with the S&P 500 hitting a new record as positive data helped extend a rally that was briefly threatened by overseas concerns.

Tensions over Ukraine pushed up metals and oil prices with fears that the growing political crisis engulfing that country may hamper global demand for commodities.

Locally, lenders such as Westpac Banking Corp, St George Bank and Commonwealth Bank of Australia (Other OTC: CBAUF - news) , which write more home loans when interest rates are low, rose. Australian house prices in the winter quarter rose the most since 2007, RPData-Rismark said.

In the miners, majors BHP Billiton Ltd, Rio Tinto (Xetra: 855018 - news) Ltd and Woodside Petroleum Ltd (Other OTC: WOPEF - news) rose.

Electronics retailer Harvey Norman Ltd was up nearly four percent, extending last week's gains after it posted a 49 percent rise in annual profit and increased its dividend.

New Zealand stocks were modestly lower in quiet trade, the benchmark NZX-50 index falling 0.18 percent to 5,214.11 as the main reporting season ended, and corporate news was thin.

Of the top-10 stocks, Auckland International Airport Ltd and telephone company Spark Ltd were both up 0.8 percent, offsetting similar sized falls for Fletcher Building Ltd and accounting software developer Xero Ltd .

Clothing retail stocks, Kathmandu Ltd and Hallenstein Glasson Ltd both gained 1.8 percent.

Two leading power companies Contact Energy Ltd (NZSE: CEN.NZ - news) , and the partly-privatised state energy company Mighty River Power Ltd also paid solid dividends.

(Editing by Eric Meijer)