Australia shares restrained by miners, Wesfarmers results disappoint

Mon Apr 28, 2014 10:09pm EDT

* S&P/ASX 200 reverses early gains to slip 0.2 percent
    * Index heavyweight Wesfarmers falls after Q3 results
    * Miners weaker as metals prices ease

    By Maggie Lu Yueyang
    SYDNEY, April 29 (Reuters) - Australian shares pulled back
from near six-year highs on  Tuesday morning, reversing early
gains on weakness in miners and as Wesfarmers slipped after its
earnings disappointed.
     Miners lost ground after iron ore prices .IO62-CNI=SI
dropped to a seven-week low below $110 a tonne, with nickel,
copper and gold prices also easing.
    Global miner BHP Billiton Ltd slipped 0.5 percent,
and smaller rival Rio Tinto Ltd lost 0.9 percent.
    Supermarkets-to-coal conglomerate Wesfarmers Ltd 
lost 1.7 percent after its third quarter earnings underscored
tough trading conditions for its Coles supermarket operations.
The firm also said its Target business recorded a 3.6 percent
on-year drop in sales, owing to "difficult trading early in the
period". 
     As of 0159, the S&P/ASX 200 index slipped 9 points
to 5,526.4, and if the downtrend holds to the close it will
break seven sessions of gains. The benchmark inched up 0.1
percent on Monday.
    Investors were also holding out for earnings reports in the
banking sector, with many expecting another solid set of
results.
    "Investors are going to wait to see what the results are,"
said Martin Lakos, division director at Macquarie Bank.
    "Seeing the upgrades by analysts in the sector, I think the
banks are also viewed as a proxy to the recovery in the economy
- there's good reason to hold onto the banks."  
    Big-cap banks were mostly higher, with Commonwealth Bank of
Australia up 0.4 percent at all-time highs of A$79.78.
Australian and New Zealand Banking Group also rose 0.3
percent to record highs of A$35.04.
    Energy stocks were also trading stronger, with Woodside
Petroleum Ltd up 0.8 percent and Santos Ltd 
gaining 1.1 percent after its partner ExxonMobil Corp 
said the PNG LNG (liquefied natural gas) project would start
production ahead of schedule. 
   Elsewhere, Australian oil and gas producers Horizon Oil
 and Roc Oil Company Ltd agreed to merge to
form a single company worth A$800 million, the two companies
said. Shares in Horizon Oil tumbled 9.5 percent while Roc Oil
added 1.5 percent after the proposed merger.
    Whitehaven Coal Ltd added 1.1 percent after its 
quarterly report showed coal sales surged 25 percent on-year to 
7.9 million tonnes for the nine months. 
    Moving the other way, Senex Energy Ltd dropped 4
percent after issuing a profit warning, saying it expects its
full year production to be at the lower end of guidance.
 
    New Zealand's benchmark NZX 50 index ticked up 0.6
percent to 5,148.7.

 (Reporting by Maggie Lu Yueyang, additional reporting by Thuy
Ong; Editing by Shri Navaratnam)