Australian shares inch higher on gains in banks and miners

Sept 22 (Reuters) - Australian shares rose modestly on Tuesday, underpinned by gains in index heavyweight banks and miners, as declining oil prices brought investors back to risk assets.

The S&P/ASX 200 index .AXJO climbed 0.3% to 8,759.60 by 0014 GMT, after closing little changed on Monday.

Oil prices fell below $100 a barrel overnight on hopes for a diplomatic breakthrough between Iran and the United States and a partial recovery in shipments from top exporter Saudi Arabia. O/R

That helped yields on long-term Australian government bonds retreat, in tandem with long-dated U.S. Treasury yields overnight. US/

However, markets largely expect the Reserve Bank of Australia (RBA) to raise interest rates again next week to tame stubborn inflation that remains above its target range. 0#AUDIRPR

RBA Assistant Governor Sarah Hunter reiterated that rates might have to rise for a fourth time this year to ensure inflation was reined in.

The resources sub-index .AXMM gained 0.4%, recouping some losses from the previous session on strong iron ore and copper prices. BHP BHP.AX, Rio Tinto RIO.AX and Fortescue FMG.AX rose between 0.2% and 0.3%. IRONORE/ MET/L

Among gold miners .AXGD, Northern Star Resources NST.AX and Evolution Mining EVN.AX advanced 1.1% and 0.7%, respectively.

Financials .AXFJ inched 0.2% higher in a second straight session of gains, with top lender Commonwealth Bank of Australia CBA.AX up 0.4%.

Rate-sensitive consumer discretionary .AXDJ and real estate .AXRE stocks climbed 0.7% and 0.4%, respectively.

Technology stocks .AXIJ rose as much as 3.9% and were on track for their steepest daily gain since late August, after the tech-heavy Nasdaq Composite .IXIC notched a record high overnight.

Sector leaders WiseTech Global WTC.AX and Xero XRO.AX surged about 4% each.

The energy sub-index .AXEJ was among the outliers, trading down 0.9%. Woodside Energy WDS.AX and Santos STO.AX lost 1.5% and 0.8%, respectively.

Further south, New Zealand's benchmark S&P/NZX 50 index .NZ50 advanced to a near two-week high of 13,853.14.