* Equities catch a breather on measured response from Trump
* BHP on six-session winning streak on firm iron ore prices
* Energy stocks set to snap five-day run of gains as oil falls
By Rashmi Ashok
Jan 9 (Reuters) - Australian shares on Thursday advanced to their highest in a month after U.S. President Donald Trump's tempered response to Iranian missile attacks calmed markets, although a fresh set of attacks kept investors on edge.
U.S. stocks closed higher after Trump said there were no casualties from Iran's Wednesday attack on U.S. forces in Iraq, and added that the United States having military power and equipment did not mean it would have to be used against Iran. S&P/ASX 200 index .AXJO was up 60.30 points or 0.9% at 6,877.9, as of 0026 GMT. Earlier in the session, the index hit its highest since Dec. 2, 2019. The benchmark closed 0.1% weaker on Wednesday.
Investors, however, continued to maintain a cautious stance amid reports of fresh missile attacks. Earlier in the day, two rockets fell inside Baghdad's heavily fortified Green Zone, which houses government buildings and foreign missions. seems tensions may have de-escalated now that Iran's retaliation so far turned out to be measured and caused no U.S. casualties," wrote Stephen Innes, chief Asia market strategist at AxiTrader in a note.
"The markets will likely quickly shrug this off as a lone wolf attack," he added, referring to the fresh attack on the Iraqi capital.
Heavyweight financial stocks .AXFJ tacked on 1.1%, with Commonwealth Bank of Australia CBA.AX and National Australia Bank NAB.AX adding 1.1% each, while Westpac Banking Corp WBC.AX advanced 0.7%.
Healthcare stocks .AXHJ also heaved a sigh of relief with CSL Ltd CSL.AX , the fourth-largest stock in the index, putting on 1.4%. Hearing aid maker Cochlear Ltd COH.AX rose 1.7%.
BHP Group BHP.AX , the benchmark's biggest stock, extended gains into a sixth straight session with a 1.2% rise, while rival Rio Tinto (LON:RIO) RIO.AX added 1.1%.
Iron ore prices inched towards five-month highs on Wednesday, with domestic miners reaping benefits of the rally, amid hopes of strong restocking demand in Chinese mills ahead of local holidays.
The dream run for gold stocks .AXGD ended, as abating Middle East tensions dampened demand for the safe-haven bullion. Top gold miner Newcrest Mining NCM.AX slipped 2.3%, while Northern Star Resources NST.AX lost 3.1%.
Smaller miners such as Evolution Mining EVN.AX , Saracen Mineral Holdings SAR.AX and Resolute Mining RSG.AX dropped between 1.6% and 3%.
Also losing favour were energy stocks .AXEJ , which were poised to snap a five-session run of gains after overnight crude prices slipped over 4%.
Heavyweights Woodside Petroleum WPL.AX and Santos STO.AX gave up about 1% each.
Elsewhere, New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.2% or 24.15 points to 11,581.13.
Among top gainers was Air New Zealand AIR.NZ , which rose 1.9%, benefiting from the tumble in oil prices.