June 28, 2019 / 2:49 AM / 4 months ago

Mining, energy sectors drag Australian shares, NZ higher

* G20 caution prevails

* Miners lose despite higher iron ore

* NZ shares at all-time high

By Renju Jose

June 28 (Reuters) - Australian shares edged lower on Friday as investors booked profits on miners after stellar gains in the previous session, while caution prevailed ahead of a meeting between U.S. and China presidents at the G20 summit this weekend in Japan.

The S&P/ASX 200 index fell 0.29% to 6,646.80 points by 0233 GMT. The benchmark added 0.4% on Thursday and was up nearly 7.5% for the quarter.

White House economic adviser Larry Kudlow told Fox News there were no preconditions and nothing was agreed before a meeting between Donald Trump and Xi Jinping on Saturday. The Wall Street Journal reported that Xi planned to present Trump with a set of terms Washington should meet before Beijing is ready to settle.

However, the South China Morning Post reported on Thursday, citing sources, that U.S. and China have agreed to a tentative truce in their trade dispute while they consider further negotiations.

Mining stocks dipped 1.8% and were the biggest drags on the benchmark index, erasing much of the gains from the previous session. The sub-index advanced nearly 2% on Thursday, hitting its highest level in nearly 8 years.

Supported by robust iron ore prices, mining stocks have had a huge run into the close of the Australian financial year, ending June 30. The mining index has added about 26% so far in 2019.

“A lot of people who have held a decent position (in material stocks) would have a substantial overweight in that sector because of the outperformance,” said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

“Going into the new financial year, they are probably cutting back to index weight.”

Rio Tinto shares dropped 2.9%, while BHP Group fell 2.2% despite Dalian iron ore prices surging to a record on Thursday on renewed concerns about tightening supply.

Financial stocks, which account for the largest weightage on the benchmark index, capped further losses, rising 0.4%. All “big four” banks advanced and were trading up in the 0.2%-0.9% range.

Energy stocks declined 1.7% with oil prices remaining steady overnight, after rising more than 2% on Wednesday. Woodside Petroleum gave up 1.40%, while Santos Ltd and Oil Search fell 1.46% and 0.83%, respectively. On the other hand, New Zealand stocks rose 0.2% to 10475.10, touching a new peak.

Meridian Energy was the top gainer on the benchmark index, advancing more than 4%.

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Additional reporting by Rushil Dutta in Bengaluru; Editing by Kim Coghill

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