Australia shares dip on weak Wall Street, resources climb

* ASX 200 dips 0.1 percent on weak Wall Street lead

* 75 shares higher, 113 shares lower, 12 shares unchanged

* Jump in iron ore prices helps support the resource space (Adds analysis, quotes, stocks on the move)

By Thuy Ong and Gyles Beckford

SYDNEY/WELLINGTON, Sept 16 (Reuters) - Australian shares slipped 0.1 percent on Tuesday, following a weaker lead from Wall Street that dampened local sentiment, though mining stocks climbed after battered iron ore prices jumped overnight, paring further losses.

Spot iron ore posted its biggest one-day rise since March overnight as firmer spot steel prices in China spurred a rebound from recent 5-year lows, although the recovery is seen as fragile amid growing signs of weakness in the economy.

The resources sector accounted for most of the gains in early trade, with global miners BHP Billiton Ltd and Rio Tinto Ltd (Xetra: 855018 - news) adding 0.6 percent and 0.8 percent each. World no.4 iron ore miner Fortescue Metals Group Ltd jumped 2.5 percent.

The S&P/ASX 200 index slipped 3.8 points to 5,469.7 by 0214 GMT. The benchmark suffered its biggest loss in five weeks on Monday, slumping 1 percent.

"As global bond markets show early signs of adjustment to an emerging higher interest rate environment, yield plays like the major banks, Telstra and property trusts are losing favour," Michael McCarthy, chief market strategist at CMC Markets, said in a note to clients.

Higher yielding stocks drifted lower, with National Australia Bank, Australia's fourth largest by market value, trading flat and Telstra Corporation Ltd, Australia's biggest telecommunications provider, declining 0.3 percent.

The healthcare sector also fell with Ramsay Healthcare Ltd dropping 3.2 percent, and Sonic Healthcare Ltd dipping 0.2 percent.

The benchmark index hit a six-year high of 5,679.5 on August 21, but has since slumped some 180 points to trade at one-month lows as a rout in iron ore prices and fears over a slowdown in China, Australia's largest export market.

Investors face a busy period, with the Scottish independence referendum result and the Federal Reserve's policy meeting later in the week, traders said.

Elsewhere, Australia's central bank has warned that record low levels of interest rates risked stoking an unwelcome increase in home prices and debt, another sign that a further easing in policy was unlikely.

UGL Ltd jumped 2.7 percent after saying it is a member of a consortium awarded a A$3.7 billion operations contract with the New South Wales government to deliver the North West Rail Link.

Paladin Energy Ltd (Other OTC: PALAF - news) dumped 3.2 percent to 1-month lows of A$0.38 after saying it expects a lower forecast for its September quarter production.

New Zealand stocks were weaker with the benchmark NZX-50 index down 0.26 percent to 5,197.08, as it retreated fell to a three-week low after hitting a life time high last week.

Several of the top stocks were softer, including Sky TV down 2 percent to NZ$6.30, and a 1 percent dip for F&P Healthcare to NZ$5.18. State-controlled national carrier Air New Zealand was down 2.7 percent at NZ$1.975.

However, accounting software developer Xero clawed back some of its recent losses, rebounding 2.6 percent to NZ$20.56. (Editing by Eric Meijer)