July 10, 2018 / 2:11 AM / a year ago

Australian shares capped by weak banking sector; NZ slips

* Aussie shares on track to snap three sessions of gains

* Materials lead gains on higher commodities

* NZ falls on consumer staples and industrials stocks

By Aditya Soni

July 10 (Reuters) - Australian shares held steady in early trade on Tuesday, as weak banking stocks offset strong gains in materials and energy stocks on the back of higher commodities and oil prices.

The S&P/ASX 200 index was down 0.2 percent or 10.9 points to 6,275.2 by 0200 GMT. The benchmark added 0.2 percent on Monday, posting a third day of gains.

While a lift in global stocks was helping local sentiment, technical trading offered opportunities at present, said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

“So, 6,308/18 might be enough for the moment. A break and close above, however, would suggest a run to 6,370/75,” he said in a note.

A recovery in Chinese iron ore futures and a rally in London copper prices bolstered materials stocks, the dominant gainers on the benchmark. The metals and mining index strengthened 1.1 percent to a more than three-week high.

Anglo-Australian miner BHP jumped 1.5 percent to a near two-month high and accounted for most of the gains on the benchmark, while its rival Rio Tinto Ltd traded 0.6 percent higher.

BHP, which has significant oil exposure due to shale assets in the United States, also cheered a rise in oil prices.

Oil prices gained on Monday, with U.S. crude ending a choppy session higher on expectations a Canadian production outage will last until September, while global benchmark Brent gained on looming sanctions on Iran and falling output in Libya.

Higher oil prices also renewed buying interest in local energy stocks, with the energy index climbing 1.2 percent to a more than three and a half year high.

Woodside Petroleum Ltd firmed 1.1 percent to its highest since January 2015, while Origin Energy Ltd jumped 2 percent to a three-year high.

Stockland Corp also traded 2.5 percent higher near a two-week high after tightening its earnings guidance to the top-end its previous forecast.

Meanwhile, financials accounted for most of the losses and were on track to snap three sessions of sharp gains.

Top lender Commonwealth Bank of Australia dropped 1.4 percent and was the biggest drag, while Australia and New Zealand Banking Group dipped about 1 percent.

In New Zealand, the benchmark S&P/NZX 50 index slipped 0.2 percent or 16.05 points to 9,045.60.

Consumer staples and industrials stocks were the biggest drags on the benchmark, with dairy firm a2 Milk Company Ltd down 1 percent, while Auckland International Airport Ltd dipped 0.9 percent.

Reporting by Aditya Soni in Bengaluru; editing by Richard Pullin

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