Oct 29 (Reuters) -Australian shares edged slightly higher on Tuesday to mark a third session of gains, boosted by a rise in domestic banking and real estate stocks, while investors awaited local inflation data due later in the week to assess the interest rate trajectory.

The S&P/ASX 200 index .AXJO rose 0.4% to 8,250.3 by 2338 GMT. The benchmark closed 0.1% higher on Monday.

The Reserve Bank of Australia (RBA) favours inflation data, due on Wednesday, as a measure to decide when to have a possible rate cut.

The country's central bank has been monitoring data to see if inflation will remain sticky, according to the Assistant Governor Sarah Hunter, and is watching other central bank policies as well.

Globally, investors also await jobs data from the U.S. later in the week, to set the tone further for the U.S. Federal Reserve to decide on the size of upcoming rate cuts.

Back in Sydney, local banking stocks .AXFJ shored up the benchmark, rising 0.6% ahead of the inflation data, with the "Big Four" banks rising between 0.5% and 0.7%.

Rate-sensitive real estate stocks .AXRE clocked the highest percentage gains on the benchmark, rising 1.4%, while sector majors LendLease Group LLC.AX and Mirvac Group MGR.AX rising 0.2% each.

Domestic miners .AXMM also saw a rise of 0.2% to help the ASX 200 index gains, as iron ore prices rose on renewed hopes of fiscal stimulus measures from China, the country's largest trading partner. IRONORE/

Mining giants Rio Tinto RIO.AX, BHP Group BHP.AX and Fortescue FMG.AX rose between 0.2% and 0.6%.

Bucking the trend, energy stocks .AXEJ declined by 0.6%, tracking falling oil prices on reduced risks of tensions in the Middle East. O/R

Energy giant Woodside Energy WDS.AX and smaller rival Santos STO.AX fell 1% and 0.4% each.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.3% higher to 12,816.03.

Reporting by Shivangi Lahiri in Bengaluru; Editing by Alan Barona

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