(Adds details, comments, stocks on the move)
By Michael Sin
SYDNEY, May 17 (Reuters) - Australian shares inched up 0.2 percent in midday trade on Friday, as the market drew support from the Australian dollar pushing further below parity, while gains in banks and big-cap miners underpinned the benchmark index.
The banking sector stocks have surged in recent weeks on strong buying led by attractive dividend yields and robust earnings.
"Financials are certainly outperforming," said Savanth Sebastian, economist at Commonwealth Securities. "I think the low interest rates are still driving consumption, it's the big driver."
The Australian dollar pushed further below parity, trading at $0.9758 against the U.S. dollar, boosting material firms James Hardie Industries Ltd 1.5 percent and Boral Ltd 0.3 percent.
The miners have struggled recently on broad falls in commodities prices, with investors concerned about slowing demand from top consumer China.
Gold miners extended their losses after the bullion dropped to a four-week low on Thursday as renewed liquidation in gold-exchange traded funds weighed on investor sentiment.
Wesfarmers Ltd (Other OTC: WFAFF - news) , the Coles supermarket owner, dropped 3.1 percent after it said that current fiscal year earnings will be disappointing and be lower than the previous year. Rival Woolworths Ltd dropped 0.9 percent.
New Zealand's benchmark NZX 50 index fell 0.6 percent, dropping 26 points to 4,610.
STOCKS ON THE MOVE
* WorleyParsons Ltd plummeted 14.1 percent after the firm cut its profit guidance to $320 to 340 million for FY 2013, saying its business in Western Australia has been impacted by the soft demand for resource infrastructure.
(Reporting by Michael Sin; Editing by Shri Navaratnam)