Australia shares edge higher as mining gains offset weak financials; New Zealand down

FILE PHOTO: An investor takes a photograph using his phone as he stands in front a board displaying stock prices at the Australian Securities Exchange (ASX) in Sydney, Australia, July 17, 2017. REUTERS/Steven Saphore

Australian shares inched up on Tuesday, as gains in miners offset losses in financials, while investors refrained from taking strong bets weighing between hopes of further stimulus from the U.S. Federal Reserve and concerns over a second coronavirus wave.

The benchmark dropped 1% earlier in the session when a sudden scare about the Sino-U.S. trade deal being in jeopardy triggered a sell-off across Asian markets.

However, markets reversed swiftly after White House trade adviser Peter Navarro walked back from earlier comments and said the trade deal remains "in place". U.S. President Donald Trump also assured in a tweet the deal with the China was "fully intact".

Major U.S. indexes rose overnight as investors held on to hopes for further government help from last week.

The S&P/ASX 200 index <.AXJO> ended 0.2% higher at 5,944.5, gaining for a third straight session.

Henry Jennings, senior analyst at Marcustoday Financial Newsletter, said the volatility in trading goes to show "how skittish the market is".

"Investors are trying to balance the Federal Reserve support stimulus with the deteriorating economy and the fact that we are seeing coronavirus cases spike in some places."

ASX 300 metals and mining index <.AXMM> advanced 0.7% after copper prices rose 0.1%. Rio Tinto <RIO.AX> and Fortescue Metals Group <FMG.AX> added 1.4% and 1.3%, respectively.

Heavyweight financials <.AXFJ> fell 0.3% and weighed on the benchmark. Commonwealth Bank of Australia <CBA.AX> dipped 0.6% after the country's corporate regulator filed a lawsuit against the top lender and its pension arm.

Elsewhere, the technology index <.AXIJ> also gained 0.3%, tracking their U.S peers, led by Afterpay Ltd <APT.AX>, up 2.1%.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index <.NZ50> fell 0.2% to finish the session at 11,132.58 in a second straight session of losses.

Port of Tauranga <POT.NZ> was the top loser, sliding 5.6%, while New Zealand Refining Company <NZR.NZ> dropped 3.7%.

(Reporting by A K Pranav in Bengaluru; Editing by Rashmi Aich)