Banks pull Australian shares lower; investors weigh Middle East risks
Investors closely watch Israel-Iran conflict
Banks down on profit taking
Fed decision due on Wednesday
June 17 (Reuters) - Australian shares inched lower on Tuesday, with weakness in the heavyweight financial sector outweighing gains in technology and gold stocks, while investors remained wary as Israel and Iran attacked each other for a fifth straight day.
The S&P/ASX 200 index ended 0.1% lower at 8,541.30 after settling flat in the previous session.
Iran urged allies to press U.S. President Donald Trump for an Israeli ceasefire, raising hopes of a de-escalation, Reuters reported on Monday. However, Trump's abrupt G7 exit and call to evacuate Tehran fuelled fears of an escalation.
"We are getting some mixed signals about whether things are escalating or de-escalating between Israel and Iran, which is leading to hesitancy from traders on the ASX today," said Tim Waterer, chief market analyst at KCM Trade.
Heavyweight financial stocks fell 0.3%, with the country's 'big four' banks slipping between 0.3% and 0.7%.
Waterer said that investors seem comfortable taking profits after a strong rally in financial stocks.
Gold stocks gained 1% as bullion's safe-haven demand was boosted by heightened geopolitical uncertainty.
Technology stocks were up 0.2%, tracking gains in Wall Street peers overnight, with sector majors Xero and WiseTech Global rising 0.4% and 0.5%, respectively.
Uranium stocks surged, extending gains from Monday, with miners Boss Energy and Deep Yellow advancing as much as 7% and 10%, respectively, to hit their highest levels since June last year.
Tony Sycamore, a market analyst at IG Australia, attributed the gains to the news that Sprott Physical Uranium Trust, the world's largest fund holding physical uranium, was set to double its capital raising to $200 million to buy more uranium on the spot market.
Separately, investors awaited the Federal Reserve's monetary policy decision on Wednesday, where it is expected to hold rates steady.
New Zealand's benchmark S&P/NZX 50 index fell 0.4% to finish the session at 12,639.35 points. (Reporting by Adwitiya Srivastava in Bengaluru; Editing by Mrigank Dhaniwala)
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