Australian, NZ shares hit fresh peaks on China-U.S. trade pact

* Australian benchmark index crosses the 7,000 level

* Financial stocks at two-month high

* Woodside Petroleum rises after co flags higher 2020 output

Jan 16 (Reuters) - Australian and New Zealand shares soared to fresh peaks on Thursday as investors cheered a long-awaited preliminary trade deal inked between China and the United States, with the Aussie benchmark index crossing the 7,000 level.

The deal, which will roll back some tariffs and boost Chinese purchases of certain American goods, marks a significant step in defusing a prolonged conflict that has rattled financial markets, struck recession alarms and disrupted supply chains.

As of 0041 GMT, the S&P/ASX 200 index was up 0.5% at 7,031.5. The benchmark closed 0.5% higher on Wednesday.

“It certainly helps that the United States and China are looking to put a united front when it comes to trade. The actual details of what they have signed is nothing earth shattering ... it is a first good step, but plenty of work needs to be done,” James Tao, market analyst at CommSec said.

“We are well above the 7,000 mark so unless there is a major shock or anything that comes through later today, it is likely that we can see this particular level maintained for the short term.”

Financial stocks, which comprise nearly one-third of the local benchmark and consists of some of Australia’s biggest companies climbed 0.8%, hitting their highest in two months.

Commonwealth Bank of Australia, the country’s largest lender and National Australia Bank each rose 0.6%.

Gold stocks jumped 1.3%, benefiting from firm bullion prices as details of the deal failed to soothe investors’ concerns about trade differences.

While Beijing and Washington have touted the Phase 1 agreement as a step forward, analysts and industry leaders say it fails to address key structural issues that led to the conflict, sets hard-to-achieve purchase targets and does not fully eliminate tariffs.

Newcrest Mining, the country’s largest gold explorer, and Ramelius Resources advanced 1.8% and 3%, respectively.

Energy stocks dipped 0.2%, dragged largely by a 1.9% drop in Whitehaven Coal, Australia’s largest independent coal producer, as it posted a 44% plunge in its second-quarter saleable coal production.

Steeper declines in the energy sector were, however, capped by a 1.1% advance in Woodside Petroleum - the country’s largest listed oil and gas explorer - after it posted a nearly 7% rise in its fourth-quarter production and forecast higher output for 2020.

Biotech major CSL Ltd pushed healthcare stocks 0.6% higher. Shares of CSL, the country’s most expensive stock, rose as much as 1% to a record high of A$300.58.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index rose 0.6% to 11,742.37.

Energy retailer Contact Energy and dairy firm a2 Milk Company were among the top boosts to the local benchmark, climbing 2.5% and 0.8%, respectively.

Reporting by Shriya Ramakrishnan in Bengaluru, Editing by Sherry Jacob-Phillips