* Australian energy, financial stocks lead decline
* Healthscope biggest gainer after takeover offer (Updates to close)
Oct 23 (Reuters) - Australian shares closed lower on Tuesday as sentiment was hit by domestic and global political uncertainty, with most sectors posting big declines.
Concerns over the Italian budget, impasse on Brexit talks as well as tensions between the West and Saudi Arabia over the killing of a journalist have dented global risk appetite. MKTS/GLOB
Losses overnight on Wall Street, partly on nerves amid the U.S. earnings season, put Sydney on the backfoot from the start, with S&P/ASX 200 index .AXJO closing down 1.1 percent at 5843.1. It marked the third session of losses, following a 0.6 percent drop on Monday.
Political uncertainty in Australia also undercut sentiment after Australia's ruling Liberal National government suffered a disastrous by-election loss over the weekend, snatching away its one-seat majority. energy index .AXEJ led declines and fell 3.2 percent to a over four-month closing low, as global oil prices dipped amid nervousness in the run-up to U.S. sanctions against Iran's exports that start next month. O/R Woodside Petroleum Ltd WPL.AX and Santos Ltd STO.AX lost 2.9 percent and 2.8 percent, respectively.
Oil Search Ltd OSH.AX ended 4.4 percent down despite reporting strong quarterly results. stocks .AXFJ lost 1.2 percent, with the country's third largest lender Australia and New Zealand Banking Group ANZ.AX slipping 1.9 percent.
Commonwealth Bank of Australia CBA.AX finished 1.1 percent down. The lender said that it would sell its 80 percent stake in Indonesian life insurance business PT Commonwealth Life. financial sector has been under intense scrutiny this year, and has been heavily sold off over the past months, after revelations of widespread misconduct.
Healthcare stocks also ended lower as heavyweight CSL Ltd's CSL.AX 1.9 percent decline weighed on the sector.
Bucking the trend, hospital operator Healthscope Ltd HSO.AX rose a record 20 percent after it received a renewed A$4.11 billion ($2.90 billion)takeover bid from private equity suitors. The stock was the biggest gainer on the ASX 200. metals and mining sub-index .AXMM declined 1.1 percent, as mining giants BHP BHP.AX and Rio Tinto (LON:RIO) RIO.AX fell 1.1 percent and 0.8 percent, respectively. Worries about slowing growth in China, a big buyer of Australian resources, have weighed on the sector.
New Zealand's, benchmark index S&P/NZX 50 .NZ50 fell 1.5 percent or 129.08 points to 8,673.18, led by healthcare and consumer stocks.
Medical device maker Fisher & Paykel Healthcare Corp FPH.NZ fell 4.4 percent, while a2 Milk Company ATM.NZ lost 0.6 percent.
Sellers circled Fisher & Paykel after a German regional court found that certain products of the company infringed a patent held by U.S. based ResMed Inc RMD.N . = 1.4164 Australian dollars)