January 7, 2020 / 1:53 AM / 15 days ago

Australia shares jump 1% as Mideast tensions ease; NZ down

* ‘Big four’ banks boost financial sector

* Gold-related stocks fall as bullion prices weaken

* Sezzle recovers from recent losses

By Nikhil Subba

Jan 7 (Reuters) - Australian shares climbed 1% on Tuesday, tracking overnight gains on Wall Street, as the mood calmed with no fresh aggression in the Middle East while defensive stocks provided a boost to the index.

The S&P/ASX 200 index was up 1% at 6,803.10, as of 0116 GMT. The benchmark finished 0.03% higher on Monday.

Wall Street ended firmer overnight as investors brushed aside worries about Middle East tensions, after a jittery start to the trade.

“The United States recovered from the down day to close up slightly overnight so that should flow through to us,” said Mathan Somasundaram, market portfolio strategist at CMC Markets.

Tensions between Washington, Iran and Iraq had increased after U.S. President Donald Trump threatened retaliation if Iran attacked any U.S. asset in reply to the airstrike in Iraq that killed top Iranian commander Qassem Soleimani on Friday.

Australia’s healthcare and tech sectors climbed as much as 1.4% and 1.9%, respectively, while utilities gained nearly 1%.

“Usually when we have Middle Eastern tensions, it takes a couple of days for the market to settle down, so we’re probably getting into that ... people are going back into defensives now because it may look like we’re having a bit of cooling down,” Somasundaram added.

Drugmaker CSL Ltd, a heavyweight in the healthcare sector, advanced 1.8% to its highest since Dec. 30, after Morgan Stanley said CSL has the “most positive business momentum” in the sector for the year, driven by accelerating immunoglobulin price growth.

Software giant Wisetech Global climbed over 3% to a one-week high, while buy-now-pay-later company Sezzle Inc surged 30% after the U.S.-based firm appeared upbeat on expectations of a successful outcome for its lending licence application in California.

Financial stocks strengthened as much as 1.2%, driven by the “Big Four” banks, which were all trading higher.

The energy sub-index rose 1.3% to its highest since Oct. 11, 2018. The sector was helped by heavyweight Santos , which advanced about 1.8% to its highest in more than five years, and Oil Search that hit its highest since Sept. 17, 2019.

Oil prices steadied overnight, after touching an almost four-month peak in the previous session, after fears of oil supply disruptions subsided.

Meanwhile, gold-related stocks tumbled 2.01% as bullion prices slipped on calmer geopolitical conditions.

Across the Tasman sea, New Zealand’s benchmark S&P/NZX 50 index inched 0.2% down to 11,600.15.

The benchmark was pressured by electricity retailer Mercury NZ, which fell as much as 2.5%, and aged-care service provider Summerset Group that shed over 2%.

Reporting by Nikhil Subba in Bengaluru, Editing by Sherry Jacob-Phillips

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