July 19, 2018 / 6:53 AM / 4 months ago

Australian shares inch up on financials, materials; NZ down

* June employment numbers top expectations

* Gold stocks down for fifth straight session (Updates to close)

By Nikhil Nainan

July 19 (Reuters) - Australian shares edged higher on Thursday helped buying in financials and material firms, though broader market gains were checked by generally subdued regional markets amid trade war worries.

The S&P/ASX 200 index closed 0.3 percent, or 17.6 points higher to 6,262.7, having climbed 0.7 percent on Wednesday.

Sentiment was still fragile in financial markets amid the U.S.-driven international trade dispute, which has entangled Europe to Mexico to China - Australia’s biggest export market.

Materials are particularly vulnerable to any sharp slowdown in China as the world’s second-biggest economy sucks up a major portion of Australian commodities and is an important driver of its growth.

On Thursday, miners advanced with Rio Tinto and South32 rising 1.4 percent and 2 percent, respectively.

South32 reported that it beat its coking coal output guidance for fiscal 2018, despite also announcing a 24 percent drop in its fourth quarter output.

BHP edged slightly higher, a day after it drove the benchmark up on the back of record annual iron ore output.

Data earlier in the day showing solid Australian jobs growth didn’t appear to have a direct impact on the market, though it did provide an encouraging backdrop for an economy facing some headwinds, including a slowing housing market and a wobbly retail sector.

The main financial index rose 0.4 percent, with Commonwealth Bank of Australia and Australia and New Zealand Banking the biggest boosts.

On the downside, gold stocks extended their declines for a fifth session as the yellow metal hovered around one-year lows, as a stronger dollar and rising U.S. interest rates pull investors away from the traditional safe-heaven.

“Forget all else, the U.S. dollar remains the single dominant factor for gold prices today. Traders are increasing gold shorts despite uncertainty over the trade war, wholly emboldened by the U.S. dollar’s ongoing strength,” said Stephen Innes, head of trading for Asia-Pacific at Oanda.

The gold index fell 1.5 percent to its lowest in over seven weeks led by Evolution Mining, which slid 4.4 percent.

The Australian economy added over 50,000 new jobs in June, and while the data did not disappoint, a rise in the participation rate to 65.7 percent curbed much needed wage gains and held the unemployment rate steady at 5.4 percent.

New Zealand’s benchmark S&P/NZX 50 index closed 0.3 percent lower at 8,917.59.

Index heavyweight a2 Milk Company was the biggest drag, falling 2.4 percent to its lowest close in 1-1/2 months. (Reporting by Nikhil Kurian Nainan in Bengaluru Editing by Shri Navaratnam)

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