* Energy and healthcare stocks weigh on benchmark
* Santos marks worst session since June 29 after HY profit dips
* NZ closes lower (Updates to close)
By Nikhil Subba
August 20 (Reuters) - Australian shares ended lower on Thursday as appetite for risky assets faded on fears that the country's relationship with China could further sour following a report that the government would block a Chinese buyout offer of a local dairy firm.
The S&P/ASX 200 index .AXJO slipped 0.8% to 6,120.00 at the close of trade. The benchmark gained 0.7% on Wednesday.
The Australian Financial Review reported that Australia will not approve China Mengniu Dairy Co's 2319.HK proposed buyout of some of the country's best-known milk brands from Japan's Kirin Holdings Co 2503.T . reality what Australia can do to China is relatively minimal, what China can do to Australia is relatively high. In that context there is not a lot of bargaining power for Australia," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.
There "will be some implications for Australia becouse we have aligned with the United States to push back on China," Somasundaram added.
Diplomatic ties between China and Australia have soured after Canberra called earlier this year for an independent inquiry into the origins of the new coronavirus and criticised a new security law in Hong Kong. energy sector .AXEJ was the worst performer falling 3.7% at close, in its worst session since July 31, hurt by lower oil prices. of oil and gas heavyweights Santos STO.AX and Origin Energy ORG.AX closed about 4.8% and 6.1% down, respectively, after both reported a dip in underlying profits. healthcare index .AXHJ fell 2.7% pressed down by industry heavyweight CSL Ltd's CSL.AX 3.9% decline, after analysts highlighted their concern over the potential impact of lower plasma collections on the drugmaker's results amid coronavirus curbs. 300 metals and mining index .AXMM fell 0.95% led by Imdex Ltd IMD.AX , down 4.2%, followed by West African Resources Ltd WAF.AX , losing 3%.
In New Zealand, the benchmark S&P/NZX 50 index .NZ50 fell 0.8% to 11,662.2.
Top losers on the .NZ50 were Mercury NZ Ltd MCY.NZ , down 3.4%, followed by Vista Group International Ltd VGL.NZ , losing 3.1%.