(Adds analysis, quotes, stocks on the move)
SYDNEY Jan 9 Australian shares slipped 0.2 percent on Thursday as falling commodities prices hit resource stocks and top-tier banking stocks fell, however news of an uptick in retail sales helped offset broader losses.
Bluechip miners weighed on the index as copper fell overnight on a firmer dollar and concerns about economic recovery in top metal consumer China.
BHP Billiton Ltd fell 0.4 percent while OZ Minerals Ltd lost 1.4 percent.
The Big Four banks also lost ground with Westpac Banking Corp slipped 0.5 percent and Australia and New Zealand Banking Group fell 0.4 percent. The Commonwealth Bank of Australia was trading flat.
The Big Four banks had a stellar year in 2013, rising between 25.1 percent and 39.3 percent each in share price, underpinned by high dividend yields and record profits.
"Some analysts feel the banks are prime selling targets," said Stan Shamu, market strategist at IG in a note to clients.
"Credit Suisse is listing Westpac among its top banking stocks to short in 2014."
The S&P/ASX 200 index fell 8.7 points to 5,307.4 by 0053 GMT, its fifth consecutive session of falls. The benchmark slipped 1 point on Wednesday.
On Wall Street, the benchmark S&P 500 index ended nearly flat on Wednesday a equities markets had a muted reaction to the minutes from the U.S. Federal Reserve's most recent meeting.
"Investors are digesting the comments made by the Fed in the minutes, also the fact that tapering for the first time will be in full force in January, so I think people are holding or taking money off the table," said Lucinda Chan, division director at Macquarie Bank.
"We had a very strong move at the end of last year."
Data from the Australian Bureau of Statistics showed an uptick of 0.5 percent in retail turnover for November, compared to a forecast of 0.3 percent.
Consumer retail staples Woolworths Ltd and Wesfarmers Ltd added 0.7 percent and 0.2 percent respectively.
Elsewhere, HFA Holdings Ltd soared 18.7 percent to seven-month highs of A$0.92 after the holding company for global funds management said it expects improved earnings results for the first half of the 2014 financial year.
Nucoal Resources Ltd slumped 17.2 percent after the company said it is preparing to lodge a submission to the New South Wales Government arguing as to why its Doyles Creek exploration licence should not be cancelled.
Qantas Airways Ltd slipped 0.3 percent as credit ratings agency Moody's downgraded its rating to Ba2 from Baa3
New Zealand's benchmark NZX 50 index rose 0.5 percent to 4,804.8.
French food group Danone said in a statement it will start legal action against New Zealand dairy exporter Fonterra following a false alert that sparked the recall of infant formula. Shares in Fonterra lost 1.7 percent
(Reporting by Thuy Ong; Editing by Eric Meijer)