* ASX200 reverses earlier falls to add 0.3 pct
* Financials lead, but gains dampened as U.S. & European stocks fell overnight (Adds analysis, quotes, stocks on the move)
By Thuy Ong and Gyles Beckford
SYDNEY/WELLINGTON, July 11 (Reuters) - Australian shares added 0.3 percent on Friday underpinned by the banking sector, but sentiment was subdued in cautious trade as Wall Street and European stocks ended lower on concerns over the fallout from troubles at Portugal's top listed bank.
The financials reversed early losses to trade higher with Commonwealth Bank of Australia (Other OTC: CBAUF - news) , the top bank by market capitalisation, added 0.3 percent, Australia and New Zealand Banking Corp rose 0.6 percent and National Australia Bank , the country's top lender by assets, inched 0.3 percent higher.
Sentiment on the local market was dampened as European and U.S. stock markets fell as investors fears over financial troubles at the family-owned holding companies behind Portugal's Banco Espirito Santo spilled across borders and markets.
"In these times, investors need to remain focused on firms with strong balance sheets as these tend to outperform during harder times," said Matt Sherwood, head of investment markets research in a note to clients.
"Investors will pay a higher premium for the safety of lowly geared balance sheets."
The S&P/ASX 200 index added 18.9 points to 5,483.3 by 0152 GMT. The benchmark eked out a gain of 0.2 percent on Thursday and is on track to fall 0.8 percent for the week, which would be its largest one-week fall since early June.
Gold miners ticked higher after bullion surged to 3-1/2 month highs on safe-haven buying. Northern Star Resources Ltd was top gainer on the ASX 200, bouncing 5.7 percent to all-time highs of A$1.67. Evolution Mining Ltd climbed 4.9 percent.
The benchmark hit a near six-year peak of 5,554.5 on April 29, but has mostly shuffled sideways since then as investors turned cautious over geopolitical tensions in Iraq and Ukraine.
Among iron ore and steel miners, Fortescue Metals Group Ltd dropped 1.2 percent after failing to meet its full-year export guidance. Bluescope Steel Ltd declined 1.6 percent.
Roc Oil Co Ltd jumped 3.1 percent after receiving a second takeover offer from an undisclosed source.
Strike Energy Ltd soared 4.2 percent after saying it will continue looking at ways to sell remaining elements of its U.S. operations.
The New Zealand sharemarket returned to its losing ways, reflecting the reduced appetite, with the benchmark NZX-50 index down 26.9 points or 0.5 percent to 5,101.03, back around two-week lows.
The overall weaker tone was driven by leading stocks, with casino operator Sky City Entertainment Ltd (NZSE: SKC.NZ - news) down 2.1 percent to NZ$3.73, around a four-and-a-half month low, and pay television operator Sky TV Ltd falling 1.8 percent to NZ$6.40.
Software (Xetra: 330400 - news) company Xero Ltd continued a now-familiar roller coaster performance down 2.5 percent at NZ$25.00, which has been a support level for the past three weeks. (Reporting by Thuy Ong; Editing by Eric Meijer)