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Australia, NZ shares slip as rocket attack on Iraq base quells risk appetite

Published 08/01/2020, 12:00 pm
Updated 08/01/2020, 12:07 pm
© Reuters.  Australia, NZ shares slip as rocket attack on Iraq base quells risk appetite
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* ASX 200 opens higher, but slips after reports of rocket attack

* Financials, healthcare and iron ore miners tumble

* Gold stocks surge 3.8%, highest level since Oct. 2019

* Energy stocks at near 15-month higher as oil prices jump

By Rashmi Ashok

Jan 8 (Reuters) - Australian shares fell on Wednesday after Iran launched a major ballistic missile attack on U.S.-led forces in Iraq days after the killing of a Iranian commander, sparking worries of a wider war in the Middle East.

Just hours earlier, U.S. President Donald Trump said the United States was prepared for any attack by Iran and vowed to retaliate if the latter attacked any U.S. assets or Americans. up slim gains at open, the S&P/ASX 200 index .AXJO shed 0.9% or 59 points to 6,768 by 0034 GMT. The benchmark had risen 1.4% on Tuesday, helped by a short lull in tensions.

"We really don't know in what form, but we can anticipate that there will be escalation. I can only see more volatility going forward at this juncture," said Brad Smoling, managing director at Smoling Stockbroking.

"This might just be the straw that broke the camel's back," he added, referring to the recent record highs U.S. stocks touched and broadly upbeat performance of global equities, which is now threatened by the growing tensions in the Middle East.

Risk-averse sentiment hurt financials .AXFJ most, with all of the "Big Four" heavyweight lenders falling. Westpac Banking Corp WBC.AX fell 1.1% while the biggest bank, Commonwealth Bank of Australia CBA.AX shed 0.8%.

Australia and New Zealand Banking Group ANZ.AX and National Australia Bank NAB.AX gave up 1% each.

Healthcare stocks .AXHJ also retreated, with CSL CSL.AX , the benchmark's fourth largest stock, falling 1.1%. Cochlear Ltd COH.AX and U.S.-based Resmed Inc RMD.N shed 2.1% and 1%, respectively.

The index's two largest stocks, global miners BHP Group BHP.AX and Rio Tinto (LON:RIO) RIO.AX fell 1.1% and 1.3%, respectively, stepping up pressure on the index.

Safe-haven gold stocks .AXGD surged nearly 3.8% to hit an over two-month high, with heavyweight Newcrest Mining NCM.AX adding 3.2%.

Northern Star Resources NST.AX , Evolution Mining EVN.AX and Resolute Mining RSG.AX gained between 3.5% and nearly 6% each.

The energy sector .AXEJ traded at near 15-month high, as oil prices surged on the news. Woodside Petroleum WPL.AX tacked on 1.2% while smaller peer Santos STO.AX climbed 2.5%.

In nearby New Zealand, the benchmark S&P/NZX 50 index .NZ50 fell 0.6% or 69.53 points to 11,560.33.

Air New Zealand Ltd AIR.NZ was among top losers, down 2%, while dairy giant a2 Milk Company Ltd ATM.NZ lost 0.5%.

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