* Australian market at 3-1/2 week lows, bluechip stocks drag
* Oil bounces on risk to supplies, gold up on safe-haven
(Adds analysis, quotes, stocks on the move)
By Thuy Ong and Gyles Beckford
SYDNEY/WELLINGTON, June 13 Australian shares
fell 0.9 percent on Friday to 3-1/2 week lows, dragged down by
the top 20 blue-chip stocks after Wall Street lost ground
overnight on concerns about growing violence in Iraq.
Stocks were also pressured by disappointing U.S. retail
sales and jobless claims data.
The S&P/ASX 200 index tumbled 44.9 points to 5,383.9
by 0148 GMT, its biggest one-day percentage loss since May 19.
The benchmark fell 0.5 percent on Thursday and looked set for a
loss of 1.3 percent on the week.
All 'Big Four' banks lost ground, with Westpac Banking Corp
losing 1.2 percent and Commonwealth Bank of Australia
down 0.6 percent to A$81.36. CBA had touched an
all-time record high of A$82.68 earlier in the week.
Among miners, BHP Billiton Ltd and Rio Tinto Ltd
lost 1.3 percent and 2.5 percent each. Iluka Resources
Ltd dropped 2.3 percent.
U.S. President Barack Obama told reporters that he refused
to rule out U.S. action in Iraq against Sunni Islamist militants
who have surged out of the north toward Baghdad, threatening to
divide the country and establish their own jihadist state.
Oil and gold shares bucked the downward trend as oil prices
jumped to nine-month highs and gold climbed 1 percent as
fighting in Iraq intensified.
Among oil companies, Australia's top oil and gas producer
Woodside Petroleum Ltd climbed 1.8 percent, Drillsearch
Energy Ltd jumped 6.2 percent, while Santos Ltd
added 0.9 percent.
Bullion miners Newcrest Mining Ltd and Medusa
Mining Ltd tacked on 2.2 percent and 4.1 percent
"It's what's happening in Iraq and the U.S. direction
overnight, the ASX is more or less in line with that", John Zhu,
a portfolio manager at Triple 3 Partners, an independent
"Unrest in Iraq - people will be uneasy about that, it's
probably a chance for investors to take a breather."
Whitehaven Coal Ltd scrambled 2.1 percent higher
after saying it would halt forest clearing at its Maules Creek
mine after anti-coal activists sought court action to stop the
work, but the coal mine's March 2015 deadline would not be
Australian based gold miner Oceana Gold Ltd
said the recent strong lift in share prices was
probably because of higher gold prices. Shares were in a trading
halt and the company last traded up 7.4 percent at NZ$3.35, a
14-month high on the New Zealand index, while on the ASX, they
were up 8 percent to near 3-month highs of A$3.10.
The New Zealand stock market fell 0.5 percent in thin
The benchmark NZX-50 index was at 5,169.09 points,
but is virtually unchanged for the week.
Of the top stocks, Auckland International Airport Ltd
was 2.2 percent lower, and software company Xero Ltd
was down 1.9 percent.
(Reporting by Thuy Ong; Editing by Kim Coghill)