* Benchmark pares earlier losses
* Financials end 0.7% lower
* Political tension in Gulf region sparks growth worries
* (Updates to close)
By Nikhil Subba
Sept 16 (Reuters) - Australian shares advanced marginally on Monday, as huge gains in the energy sector, inspired by a leap in oil prices, were limited by downward trending financials, amid global growth jitters.
The S&P/ASX 200 index inched 0.1% to 6676.20 at the close of trade. The benchmark closed 0.2% higher on Friday.
Markets were cautious as oil prices spiked by about 11% after two plants at the heart of Saudi Arabia’s oil industry were attacked on Saturday, knocking out more than 5% of global oil supply.
This sent the energy index jumping 4.3% to a near four-month peak at close of trade, with oil and gas major Woodside Petroleum closing at a six-week high, while industry heavyweight Santos Ltd closed at its highest level since late 2014.
The world’s largest miner, BHP Group, which also has major exposure to oil, closed at its highest in nearly seven weeks on higher oil and iron ore prices, helping the broader mining index gain about 2%.
An increase in political tensions in the Gulf region sent gold prices higher as traders scurried into safe haven buying, ultimately helping gold stocks rise 3.3% at the close.
“It is not clear when production will be restored, and traders have commented that a prolonged period of restricted production could drive oil prices close to $100. Such a big spike in oil prices could be a shock for the world economy”, analysts at Argonaut said of the attacks in Saudi Arabia in a note to clients.
“Higher oil prices in general put a drag on economic growth”, said Marc Kennis, principal of Pitt Street Research.
Financial stocks, the heaviest components of the Australian benchmark, closed down 0.7%, with all of the “Big Four” banks - Commonwealth Bank of Australia, Westpac Banking Corp, National Australia Bank and Australia and New Zealand Banking Group - trading lower.
Neighbour New Zealand’s benchmark, the S&P/NZX 50 index , shed 0.3% or 31.7 points to finish the session at 10,831.75.
Electricity retailer Contact Energy fell 2.7% at close while peer Genesis Energy closed 2.3% lower. (Reporting by Nikhil Subba in Bengaluru, editing by Louise Heavens)