Australia shares lose early gains, investors eye U.S. employment data

Fri Apr 5, 2013 1:42am EDT

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SYDNEY, April 5 (Reuters) - Australian shares finished the session 0.5 percent lower on Friday, retreating from early gains after an unexpected jump in U.S. weekly jobless claims stoked worries ahead of U.S. employment data later in the day.

The declines came after modest gains in early trading on the back of aggressive new stimulus policies from the Bank of Japan.

Financials finished the session weaker, with top lender, the Commonwealth Bank of Australia, dragging banks down the most, losing 1.7 percent.

"After having opened modestly higher, the ASX 200 has struggled to hold on to its early gains as the financials weighed," said Stan Shamu, market strategist at IG Markets.

The S&P/ASX 200 index lost 22.1 points to finish the session at 4,891.4. The last time the index traded below 4,900 points was on February 6. The benchmark fell 1.5 percent for the week, a fourth consecutive week of losses.

"The move lower in Australian equities showed some signs of position squaring leading up to the U.S. jobs report," said Tim Waterer, senior trader at CMC Markets.

"Traders are not exactly being filled with confidence by the indicators of the U.S. so far this week."

Traders are cautious after manufacturing and employment data were short of the mark, raising questions about the pace of the U.S. recovery, Waterer noted.

Global iron ore miners BHP Billiton Ltd and Rio Tinto Ltd climbed 1.5 percent and 1.8 percent respectively on prospects of continued demand in China.

Economic growth in China, the world's top buyer of iron ore, is expected to slow to a rate of around 7 percent a year for the rest of the decade, but its demand for resources will continue to fuel growth in Western Australia, the premier of the resource-rich state said in an interview.

Gold miners were firmer, with Newcrest Mining Ltd and Regis Resources Ltd rising 1.7 percent and 2.9 percent.

Defensives fell with supermarket operators Woolworths Ltd and rival Coles-owner Wesfarmers Ltd losing 1.8 percent and 1.5 percent respectively. Blood products maker CSL Ltd was down 1.3 percent and top telecommunications company Tesltra Ltd slipped 0.2 percent.

Top airline Virgin Australia Holdings Ltd dropped 4.7 percent after announcing its preliminary operating statistics. Domestic operations saw a revenue load factor fall 1.3 points in February.

Shares in Billabong International Ltd were suspended as revised takeover offers came in considerably lower than indicative bids. According to the Australian Financial Review on Friday, the highest valuing the battered surfwear firm received was only at A$287 million ($300 million).

Shares in Sundance Resources Ltd were in voluntary suspension as outcomes of its consultations with Hanlong are being drafted and documented.

New Zealand's benchmark NZX 50 index finished the session up 0.1 percent or 2.8 points to 4,433. (Reporting by Thuy Ong; Editing by Sanjeev Miglani)

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