* Banks higher as risk aversion retreats
* Commodity stocks track higher metals
* UK Q2 GDP revised to -0.7 percent from -0.8 percent
By Harpreet Bhal
LONDON, August 28 (Reuters) - Britain's leading share index closed 0.8 percent higher on Friday, helped by a rebound in commodity stocks and banks as the index ends the month with hefty gains.
The FTSE 100 snapped two sessions of losses to close up 39.55 points at 4,908.90. Earlier the index hit a session high of 4,944.16, the best since Oct. 6 last year.
Banks added the most points to the index as risk aversion among investors retreated. Barclays, HSBC, Standard Chartered, Royal Bank of Scotland and Lloyds Banking Group climbed 1.3 to 6.3 percent.
A recovery in corporate earnings and encouraging economic data have helped the FTSE 100 to rebound 42 percent since the trough in March, with the index up 6.5 percent in August.
"There is no doubt that we have bottomed out. So (the rally) that we have seen is justified," said Howard Wheeldon, strategist at BGC Partners.
The index has gained 15.5 percent so far this quarter, on track for its best quarterly rise since October-December 1998, but analysts warn that there could be more caution ahead.
"August is going out with a good news bang, but the question is where do we go from here. There will be a degree of nervousness through September and great caution through the rest of the fourth quarter," he said.
Mining stocks were firmer as metals prices rose, with copper also hitting an 11-month high. Rio Tinto, Xstrata, Lonmin, Anglo American, Kazakhmys and Fresnillo were up 2.2 to 5.5 percent.
Energy stocks were also positive as crude climbed towards $73 per barrel. BP, Royal Dutch Shell, Tullow Oil and Cairn Energy added between 1.1 and 2.3 percent.
The FTSE will be closed on Monday, Aug. 31, for a public holiday, and will resume trading on Tuesday.
SMALLER GDP CONTRACTION
Bolstering a view of economic improvement, data showed that the UK economy contracted less than thought in the second quarter, revised up to -0.7 from -0.8 after officials upgraded their estimates of industrial output.
The revision took the annual drop to 5.5 percent from 5.6 percent, which represents the biggest year-on-year fall since records began in 1955, dampening the expectation of a speedy recovery from the recession.
Across the Atlantic, the Reuters/University of Michigan Surveys of Consumers showed confidence fell to its lowest level in four months in August, stung by worries over unemployment and personal finances, but the mood improved from last month.
Meanwhile, data showed U.S. consumer spending edged up 0.2 percent in July, offering hope a rise in consumption will help fuel an economic recovery in the U.S.
Among the fallers on the FTSE 100, Serco Group fell 3.2 percent, reversing gains from the previous session which saw the stock climb to a seven-month high after the firm reported an upbeat outlook.
Defensive pharmaceuticals, viewed as safe-bet stocks, retreated as investors risk appetite picked up. AstraZeneca and GlaxoSmithKline declined 1 and 0.8 percent respectively.
Utility firms were also lower with National Grid, Penon Group, Severn Trent and United Utilities Group falling 1.4 to 2.8 percent. (Editing by Rupert Winchester)