May 12 (Reuters) - Australian shares slipped on Tuesday, dragged by healthcare stocks and banks, while gains in commodity stocks offset some losses as investors remained cautious ahead of the federal budget and ongoing Middle East conflict.

The S&P/ASX 200 index .AXJO was 0.4% down at 8,670.60 by 0101 GMT. The benchmark closed down 0.5% on Monday and has lost more than 2% in the last two sessions.

Risk appetite remains low as hostilities in the Middle East, which have tightened energy supply, continue after U.S. President Donald Trump said that a ceasefire with Iran was "on life support" after Tehran's response to a U.S. proposal to end the war made clear the two sides were still far apart on a number of issues.

Back home, financials .AXFJ dropped 1.4%, their lowest level since April 1.

All the "Big Four" banks lost between 1.5 and 2.5%.

Healthcare stocks .AXHJ tumbled 2.5% as sub-index heavyweight CSL CSL.AX slid as much as 6%, extending Monday's slump.

Brokerage firm Citi sharply downgraded its rating on the stock after the biotech firm flagged $5 billion in impairment charges across 2026-2027 and cut its annual profit forecast a day ago.

Technology stocks .AXIJ lost 3.2%, set for steepest one-day decline in over a month.

Elsewhere, miners .AXMM hit their highest level since March, advancing 3% on strong iron ore and copper prices. IRONORE/ MET/L

Sector heavyweights Rio Tinto RIO.AX and BHP BHP.AX logged fresh peaks in early trade.

An uptick in bullion prices helped gold stocks .AXGD rise 4% to notch their highest level since late April. GOL/

Energy stocks .AXEJ firmed 0.7% as oil prices settled higher on war-driven volatility. O/R

Locally, investors were also waiting for the federal budget, due later in the day.

Australia is set to deliver a narrower-than-previously-flagged budget deficit as the government banks on commodity-driven revenue windfalls, while seeking to bring forward politically sensitive reforms without stoking inflation.

In New Zealand, the benchmark S&P/NZX 50 index .NZ50 fell 1.4% to 13,028.75, on track for its worst day since late March.