Jan 17 (Reuters) - Australian shares traded flat on Friday, with gains in healthcare firms offset by losses in miners, including Rio Tinto RIO.AX, which tumbled on speculation around early-stage merger talks with London-listed smaller rival Glencore GLEN.L.

The S&P/ASX 200 index .AXJO marginally fell 0.1% to 8,322.2 points by 2322 GMT. The benchmark is on track to record a second consecutive weekly gain.

Rio Tinto's shares fell 1.21% following reports of brief, unsuccessful merger talks with Glencore late last year, despite earlier speculation by Bloomberg News of ongoing early-stage discussions.

Meanwhile, local employment surprised markets as it sped past forecasts in December. Traders now see a 69% probability of the Reserve Bank of Australia cutting rates during its first meeting on Feb. 18. 0#AUDIRPR

Upcoming fourth-quarter inflation data later this month will likely be crucial, with analysts expecting core inflation to rise 0.6% or less, potentially the smallest increase since mid-2021.

Banks .AXFJ, which have historically benefitted from higher-for-longer interest rates, slipped 0.2%, with the country's top lender Commonwealth Bank of Australia CBA.AX falling 0.3%.

Miners .AXMM declined 0.5%, with sector major BHP BHP.AX falling 0.3%. The subindex is set to log its fourth straight week of gains.

Healthcare stocks .AXHJ gained 0.6%, with biotech firm CSL CSL.AX rising 0.2%, as the Aussie dollar remains under pressure. AUD/

Energy stocks .AXEJ lost 0.2% on the back of declining oil prices, with subindex leaders Woodside Energy WDS.AX and Santos STO.AX little changed. O/R

Separately, Lynas Rare Earths LYC.AX fell 4.8% after the world's largest producer of rare earths outside of China missed consensus estimates for its quarterly sales revenue.

Insignia Financial IFL.AX rose 5.2%, its highest level in over three years, as suitor CC Capital sweetened their bid for the firm, higher than Bain Capital's offer.

New Zealand's benchmark S&P/NZX 50 index .NZ50 was marginally up 0.2% at 13,020 points, set for their best week since Dec. 23. Local inflation data for the fourth quarter is due on Jan. 22.

(Reporting by Nikita Maria Jino in Bengaluru; Editing by Alan Barona)

((Nikita.Jino@thomsonreuters.com))

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