* Focus turns to Sino-U.S. trade talks
* Santos gains on flagging positive oil flows at well
* Fonterra surges on naming new chief operating officer
By Ambar Warrick
Oct 8 (Reuters) - Australian shares rose on Tuesday, supported by gains in energy firms and miners, with markets cautiously optimistic for some headway in U.S.-China trade talks this week.
The S&P/ASX 200 index rose 0.5% or 32.10 points to 6,596.20 by 0055 GMT. The benchmark rose 0.7% on Monday.
High-level negotiations between Washington and Beijing are due to begin on Thursday, the first in more than two months after talks in July failed to yield any meaningful results. The 15-month long trade dispute has eroded global economic growth and has prompted large movements out of risk assets.
“I think it’s a common word - ‘hopium’ - there’s a lot of hope that we do see something. However, if you look at it realistically, there’s really not a lot that I can see that would motivate China to getting a major deal done,” said Brad Smoling, managing director at Smoling Stockbroking in Southport, Queensland.
“The reality is, because of decades of U.S. manufacturing being hollowed out and outsourced, they’re now in the dire position of renegotiating a trade deal with not a lot to offer.”
Energy stocks rose 0.9%, propped up by gas explorer Santos Ltd rising more than 2% after it flagged “extremely positive” oil flows at a field in Western Australia.
Financial stocks rose about 0.2%, with Commonwealth Bank of Australia Ltd, the country’s largest lender, rising about 0.4%.
Australia and New Zealand Banking Group rose 0.4% after it flagged a A$559 million ($376 million) charge to its second-half profit from increased provisions for customer-related remediation.
Mining stocks edged up, with metal miners in the lead after copper prices firmed. Oz Minerals and Rio Tinto rose more than 1% each.
However, gold stocks retreated 1.7, tracking a decline in bullion prices as investors moved back into risk assets amid some optimism over the Sino-U.S. negotiations.
New Zealand equities were slightly lower as gains in consumer stocks were offset by losses in utilities.
The benchmark S&P/NZX 50 index fell 0.1% or 11.77 points to 10,963.85.
Fonterra , the world’s largest dairy producer, surged more than 4% after it named Fraser Whineray to the newly-created role of chief operating officer.
Whineray currently serves as the chief executive of energy retailer Mercury NZ Ltd. Shares of Mercury dropped 0.7%. (Reporting by Ambar Warrick in Bengaluru Editing by Jacqueline Wong)