* S&P ASX/200 dips 0.4 pct, banking sector drags
* Gold surges 3 pct overnight to buoy some miners
(Adds analysis, quotes, stocks on the move)
By Thuy Ong and Naomi Tajitsu
SYDNEY/WELLINGTON, June 20 Australian shares
stepped back on Thursday after posting their biggest one-day
gain in six months in the previous session, with the crisis in
Iraq putting a bit of a dampener although a surge in gold helped
to contain broad market losses.
President Barack Obama said on Thursday he was sending up to
300 U.S. military advisers to Iraq but stressed the need for a
political solution to the Iraqi crisis as government forces
battled Sunni rebels for control of the country's biggest
The financial sector was the biggest drag on the market.
Commonwealth Bank of Australia, the biggest bank by
market capitalisation, lost 0.5 percent, and Westpac Banking
Corp declined 0.4 percent.
The S&P/ASX 200 index fell 27.2 points, or 0.5
percent, to 5,441.0 by 0235 GMT. The benchmark surged 1.6
percent on Thursday, its biggest one-day percentage gain since
December 19, spurred by the U.S. Federal Reserve's upbeat
assessment of the economy and a commitment to keep rates low for
some time to come.
For the week, the market is on track to add 0.7 percent.
A handful of defensives also pulled back, led by top
telecommunications provider Telstra Corporation Ltd
falling 1 percent.
"I think a bit of moderation today is not a terrible thing,"
said Scott Schuberg, CEO at Rivkin Securities. "There is a lot
of support at the 5,400 level so long as we stay elevated above
that we can look for a resumption of the uptrend."
Helping to steady the market somewhat, gold miners rallied
after bullion surged over 3 percent for its best day in eight
months overnight. The Fed's lack of commitment to raise interest
rates and continued tensions in the Middle East unleashed a wave
of short covering in the yellow metal.
Australia's top gold miner Newcrest Mining Ltd
jumped 4.5 percent to mid-April highs of A$10.87, while Regis
Resources Ltd rose 4 percent.
Westfield Group and Westfield Retail Trust
were in a trading halt as the world's biggest retail property
group was cleared to split its business after shareholders voted
in favour of the move.
Ten Network Holdings Ltd tumbled 8.5 percent to
A$0.25, its lowest price since early April, extending its fall
after the embattled network issued a profit warning the previous
New Zealand's benchmark NZX-50 index slipped 34.44
points to 5,157.72, as retailer Warehouse Group sank as
much as around 8 percent, hitting a 1-1/2-year low of NZ$3.01,
after it cut its full-year profit forecast.
Corporate software developer Diligent Board Member Services
fell 3.7 percent to NZ$4.40, retreating from a NZ$4.70
hit in early trade, as first-quarter results showed a slowdown
in revenue growth.
"There's some money getting pulled out of the market to
make room for the new issues," said James Smalley, director of
Hamilton Hindin Greene in Christchurch.
Travel software developer Serko priced its
upcoming share offer at NZ$1.10 per share, before it lists on
the stock exchange next week.
(Editing by Shri Navaratnam)