SYDNEY/WELLINGTON, July 8 (Reuters) - Australian and New Zealand shares were flat on Friday as investors in Australia waited for an outcome to Australia's election and traders in New Zealand took a breather from a nine-session rally.
The S&P/ASX 200 index .AXJO gained 1.18 points to 5,229.1 by 0144 GMT, a rise of 0.2 percent. The benchmark is down 0.3 percent for the week, after a rally on Thursday was capped by a credit outlook downgrade from ratings agency Standard and Poor's. a bit of a low news day, everyone's waiting for the final resolution to the election and what that might mean," said senior analyst Adam Tout at CPS Capital in Perth.
"Bond yields are incredibly low so the market has become a bit risk-averse, I think everyone's just rotating funds towards cash and waiting to see what unfolds. I wouldn't underestimate that a fair bit of Australia is away for school holidays and anecdotally the market does slow down a bit then."
The financial and mining sectors led Australia's bourse higher.
Despite Australia cutting its forecast for iron ore prices, shares in South32 Ltd S32.AX added 4.26 percent, BHP Billiton (LON:BLT) Ltd BHP.AX stock rose 0.31 percent and Rio Tinto (LON:RIO) Ltd RIO.AX gained 1.27 percent.
Whitehaven Coal Ltd WHC.AX stock surged 8.54 percent after thermal coal prices jumped to 2016 highs this week.
Financial stock CYBG PLC CYB.AX - the holding company which owns Clydesdale Bank and Yorkshire Bank - added 4.99 percent, although it remains 29.6 percent below its price before the UK voted to leave the European Union.
Similarly exposed BT Investment Management Ltd Group BTT.AX gained 5.03 percent, but is likewise down 23.8 percent since the Brexit referendum result.
New Zealand's benchmark S&P/NZX 50 index .NZ50 was largely flat on Friday as investors took a breather after nine sessions of gains.
The index inched up 0.06 percent or 4.18 points to 7,011.700 and was headed for its second week of gains, poised to rise 1.23 percent on the week.
Heartland Bank HBL.NZ led gains, rising 1.63 percent, while telecommunications operator Spark SPK.NZ was up 1.37 percent.
Ports of Tauranga POT.NZ rose 1.22 percent and Air New Zealand AIR.NZ was up 0.93 percent.
The New Zealand subsidiaries of Australian banks led losses, after Thursday's announcement that S&P had revised its Australian ratings outlook from stable to negative.
Westpac WBC.NZ fell 1.57 percent and ANZ ANZ.NZ lost 1.15 percent.
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