Australia shares left with thin gains as home loans disappoint

SYDNEY Mon Dec 10, 2012 12:57am EST

SYDNEY Dec 10 (Reuters) - Australian shares edged up marginally on Monday, but a disappointing rise in home loans brought the benchmark index off early highs made on positive U.S. jobs data and industrial output and retail sales figures from China.

Australian home loan commitment for October released by the Australian Bureau of Statistics showed a rise of 0.1 percent, well short of a forecasted rise of 3 percent according to a Reuters poll.

"The market has been fading throughout the day, what we're seeing is some of these larger resource stocks are doing okay," said Damien Boey, equity strategist at Credit Suisse.

"There's just generally a lot of nervousness. We had the housing finance data which wasn't that great."

The benchmark S&P/ASX 200 index came off a high of 4,571.7 points, but held in positive territory at 4,557.9, up 0.1 percent, or 6.1 points from Friday when the market closed at a seven-week high.

Bellwether miners BHP Billiton Ltd rose 0.6 percent while Rio Tinto Ltd rallied 1.9 percent.

Steelmaker Fortescue Metals Group jumped 6.9 percent. The company is in talks with BC Iron, the smallest among a tight circle of iron ore miners in Australia's Pilbara region to acquire majority control over its Nullagine joint venture. Rival Bluescope Steel gained 0.3 percent.

Banks were mostly strong, with Westpac Banking Corp heading gains, rising 0.6 percent. Australia New Zealand Banking Corp bucked the trend, slipping 0.2 percent.

Defensives were somewhat weak, blood products maker CSL Ltd dropped 2.3 percent while food retailer Woolworths lost 0.8 percent.

China's factory output and retail sales growth have risen to eight-month highs, according to data released on Sunday. But trade figures released on Monday, showing exports grew 2.9 percent year on year in November and imports were flat, disappointed analysts.

U.S. companies kept up their slow but steady hiring pace in November, where the unemployment rate fell to a near four-year low of 7.7 percent, defying predictions that Superstorm Sandy would deal a big blow to the labour market.

Radio station owner Souther Cross Austereo lost 5.9 percent amid a backlash and cancelled advertising after the death of a nurse following a prank call to the hospital treating Prince William's pregnant wife.

Shares in Australia's loss-making Ten Network Holdings sank 9 percent on Monday as they resumed trading after Ten's second cash call in under six months.

New Zealand's benchmark NZX 50 index slipped 0.3 percent or 10.8 points to 4,030.8. (Reporting by Thuy Ong; Editing by Simon Cameron-Moore)