Australia shares slip, investors cautious amid backdrop of weak data

Sun Jun 29, 2014 10:48pm EDT

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By Thuy Ong and Naomi Tajitsu

SYDNEY/WELLINGTON, June 30 (Reuters) - Australian shares edged lower on Monday on weakness in banking and mining stocks, though activity was subdued with few catalysts to spur interest.

With the backdrop of weak U.S. economic data in recent days, and a subdued Wall Street on Friday, investors were cautious as they awaited a slew of global data this week, including purchasing managers' indices (PMIs) and U.S. payrolls data.

Copper slipped after hitting its highest in 3-1/2 months, spurred by hopes that an improved outlook for the world's No.2 economy China may strengthen demand just as supply is tightening.

Among mining stocks, BHP Billiton Ltd was down 0.4 percent, and Rio Tinto Ltd dropped 0.5 percent. Elsewhere, Oz Minerals Ltd and Lynas Corporation Ltd lost 0.7 percent and 2.1 percent each

In relatively light activity in the last trading day of the financial year, the S&P/ASX 200 index was down 17.8 points, or 0.3 percent, at 5,427.3 by 0237 GMT. The benchmark slipped 0.4 percent on Friday, and is about 1.2 percent lower so far in June.

The index has been trading in the 5200-5550 range in the past five months, and Martin Lakos, division director at Macqurie Bank, said investors are looking for a catalysts to break out of this range.

"I think we're more likely to see the market break up than break down and that might be after the reporting season in August."

That confidence was backed up by a Reuters poll conducted last week, which found the index is set to end 2014 at a six-year high, underpinned by a sustained pick-up in domestic housing, a falling Australian dollar, and a return to global growth.

For the first six months of 2014, the benchmark index is set to add 1.4 percent, versus a 3.5 percent gain in the same period last year.

Qantas Airways Ltd tumbled 4.3 percent to 5-1/2 week lows of A$1.28 after saying demand at Qantas' domestic services in the month was "negatively impacted by weak consumer confidence and business sentiment".

In the financial sector, Commonwealth Bank of Australia slipped 0.3 percent and Westpac Banking Corp declined 0.2 percent.

Dick Smith Holdings Ltd jumped 1.6 percent after reaffirming its pro forma profit forecasts, and pro forma sales of A$1.23 billion for the year ending 29 June 2014.

New Zealand shares were little changed, with the benchmark NZX-50 down 0.1 point at 5,144.10.

The Warehouse Group edged up 0.3 percent after the country's largest retailer announced it would lease sites run by Australian discount electrical retailer Good Guys, which is exiting the New Zealand market.

(Editing by Shri Navaratnam)

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