* Banks, consumer staples lead the index down
* Materials cap losses, on higher global prices
* Rio surges on a share-buyback announcement
By Aditya Soni
Sept 20 (Reuters) - Australian shares dipped on Thursday, pulled lower by banks and consumer staples as some investors appeared to shift funds to emerging markets as they felt less worried about the U.S.-China trade war.
The S&P/ASX 200 index .AXJO fell 0.2 percent or 14.500 points to 6,175.50 by 0200 GMT. The benchmark jumped 0.5 percent on Wednesday.
Mathan Somasundaram, market portfolio strategist with Blue Ocean Equities, said the escalating trade tensions had pushed money from emerging markets into the Aussie markets but now that the tensions are easing, some investors are pulling out of Australia.
"Bad news was good news for us for the last month and now good news is bad news so we're falling on the back of that and I think that'll play out for a short period of time," he said.
Aussie banks had the heaviest losses on Thursday, with the financial index .AXFJ weakening 0.4 percent.
Westpac Banking Corp WBC.AX fell 0.5 percent and was the biggest drag on the benchmark while Australia and New Zealand Banking Group Ltd ANZ.AX slipped 0.4 percent.
Consumer staples were also in the red, with index heavyweight Woolworths Group Ltd WOW.AX dropping 1.7 percent. Treasury Wine Estates Ltd TWE.AX fell as much as 2.6 percent to a near two-and-a-half month low.
Bucking the trend, materials rose, supported by overnight gains in copper and gold prices.
Copper jumped to its highest in three weeks on Wednesday, boosted by a weaker dollar. MET/L
Global miner BHP BHP.AX traded 1.4 percent higher at a more than two-week high, while Rio Tinto (LON:RIO) Ltd RIO.AX surged as much as 3.7 percent to its highest since Aug. 2.
Before the market opened on Thursday, Rio announced a $3.2 billion share-buyback following the recent sale of some Australian coal assets. gold index .AXGD jumped 3.1 percent to a more than four-week high, with Northern Star Resources Ltd NST.AX surging 5.7 percent to a record high.
Rand Mining RND.AX said on Thursday its East Kundana Joint Venture with Northern Star and Tribune Resources TBR.AX is performing well.
Drugmaker CSL CSL.AX , the fifth largest by market value, advanced 1.5 percent. Over the past three days, it shed about 4 percent.
In New Zealand, the benchmark S&P/NZX 50 index .NZ50 slid 0.2 percent or 15.94 points to 9,329.12.
Shares of telecommunication services accounted for nearly half of the benchmark's losses, with Spark New Zealand Ltd SPK.NZ falling 2.7 percent to its lowest since Sept. 11.