(Reuters) - Australian shares closed almost unchanged on Tuesday as an escalation in Sino-U.S. trade tensions hit risk sentiment, while energy stocks jumped on a rally in oil prices.
The S&P/ASX 200 index <.AXJO> fell 1 point to 6,185.90 at the close of trade. The benchmark dipped 0.1 percent on Monday.
Asian shares were on the defensive as the latest exchange of U.S.-China tariffs revived fears the trade dispute would knock global growth. [MKTS/GLOB]
Banks accounted for nearly half the losses in Australia, with the financial index <.AXFJ> falling 0.7 percent to its lowest since Sept. 14.
Adding to the woes of the scandal-hit sector, the country's corporate regulator on Tuesday slammed the country's four largest banks and largest listed wealth manager for delays in reporting breaches.
Hurt by the negative sentiment, top lender Commonwealth Bank of Australia <CBA.AX> fell 1.1 percent to a more than two-week low, while Australia and New Zealand Banking Group Ltd <ANZ.AX> dropped 1.3 percent.
On the other hand, energy stocks <.AXEJ> jumped 2.2 percent to their highest since Aug. 9, braking the benchmark's slide.
Gains in sector were underpinned by oil prices, which were holding just below four-year highs hit in the previous session. [O/R]
Woodside Petroleum Ltd <WPL.AX> rose 2.5 percent to a more than 3-1/2 year high, while Santos Ltd <STO.AX> firmed 2.8 percent to its highest since May 2015.
The rally in oil also helped BHP <BHP.AX> which was up 0.8 percent at its highest since August 6.
The wider metals and mining index <.AXMM> rose 0.6 percent.
"Banks are still under a bit of pressure...so the market is looking for an area to invest and they are seeing more value in Australian miners," said Dale Raynes, associate Director at CPS Capital.
Raynes said bargain hunters were also picking up mining stocks as several counters were trading below their price targets.
In New Zealand, the benchmark S&P/NZX 50 index <.NZ50> rose 0.1 percent or 8.45 points to finish the session at 9,345.96.
Utilities led the gains, with Meridian Energy Ltd <MEL.NZ> climbing 1.2 percent.
(Reporting by Aditya Soni in Bengaluru; Editing by Kim Coghill)
