News: RIO Australian shares drop on strong dollar, China COVID woes; energy drops

Dec 29 (Reuters) - Australian shares extended losses on Thursday, weighed by gold and oil stocks, as a stronger greenback and COVID-19-led demand concerns from top consumer China dented investors' sentiment.

The S&P/ASX 200 index (xjo) fell 0.5% to 7,051.3 by 2305 GMT. The benchmark fell 0.3% on Wednesday.

Energy stocks .AXEJ dropped 2.3% to lead losses as investors weighed concerns around a surge in COVID-19 cases in China against the chances that the country's decision to dismantle pandemic curbs would boost fuel demand.

Oil and gas giant Woodside Energy (WDS) fell 2.7%, while Santos (STO) shed 2.6%

China will stop requiring inbound travellers to quarantine from Jan. 8, a major step towards relaxing stringent curbs on its borders amid hospitals in the country battling intense pressures due to a surge in infections.

Weak bullion prices dragged gold stocks .AXGD 1.5% lower after reaching a six-month peak in the previous session, as a stronger dollar and higher U.S. Treasury yields dragged the commodity lower.

Sector heavyweight Newcrest Mining (NCM) fell 2%, while Northern Star Resources (NST) was down 1.9%.

Miners .AXMM dropped 1% as iron ore futures were mixed. BHP Group Ltd (BHP) , Rio Tinto (RIO) , and Fortescue Group (FMG) slipped between 0.3% and 1.7%.

Tech stocks .AXIJ shed 0.6%, following overnight losses on Wall Street as investors grappled with rising COVID-19 cases in China, and geopolitical tensions heading into 2023, among others.

ASX-listed shares of Block Inc (SQ2) were down 0.8% while Xero (XRO) fell 1.3%

Financials slid 0.3%, with the "Big Four" banks losing between 0.3%-1%.

New Zealand's benchmark S&P/NZX 50 index (nz50) rose 0.2% to 11,562.81 points.