* Banking sector drags as Westpac results beat expectations
but no special dividend
* Resources higher on metals prices and rise in iron ore
exports to China from Port Hedland
(Adds analysis, quotes, stocks on the move)
By Thuy Ong
SYDNEY, May 5 Australian shares slipped 0.2
percent on Monday morning, hurt by heavyweight Westpac losing
ground on disappointment over the lack of a special dividend,
caution over tensions in Ukraine and a weak Chinese
Investors have recently started to cut their exposure to the
banking sector due to analysts' downgrades and concern their
stocks have run up ahead of their ability to generate future
Westpac Banking Corp dropped 1.4 percent despite
reporting a better-than-expected rise in first half cash profit.
"I think the reason we're seeing it trade down is because we
have seen big expectation around a special dividend, said Julia
Lee, an equities analyst at stockbroker Bell Direct.
Other banks were also trading lower, with Commonwealth Bank
of Australia off 0.4 percent and Australia and New
Zealand Banking Corp down 1.3 percent. The three banks
had touched record highs last week driven by high dividend
The S&P/ASX 200 index slipped 11.6 points to 5,446.5
by 0214 GMT, reversing modest early gains. The benchmark added
0.2 percent on Friday, but lost 1.3 percent for the week,
snapping 6 consecutive weeks of gains -- the longest winning
streak since August 2013.
Aquila Resources Ltd stole the limelight in morning
trade, jumping 37 percent to near 2-year highs of A$3.36, after
China's Baoshan Iron & Steel Co Ltd and Australia's
Aurizon Holdings Ltd launched a $1 billion bid for the
resources firm. Aurizon dropped 4.6 percent to 3-month lows of
Elsewhere, a private survey showed activity in China's
manufacturing sector contracted for a fourth consecutive month
in April, adding to questions about whether the world's
second-largest economy is still losing momentum.
The weak data from Australia's biggest export market didn't
trigger any large selling though it added to a cautious morning
session amid tensions in Ukraine.
Pro-Russian militants stormed a Ukrainian police station in
Odessa on Sunday and freed nearly 70 fellow activists as the
country's leaders lamented a police force they said was widely
undermined by graft or collaboration with separatists.
BHP Billiton Ltd climbed 0.9 percent and rival Rio
Tinto Ltd gained 1 percent. Iron ore exports to China
from Australia's Port Hedland, which accounts for about a fifth
of the globally traded market, rose by almost 7 percent in
April, from March when they jumped 27 percent.
Gold miners Newcrest Mining Ltd and Northern Star
Resources Ltd jumped 3.4 percent and 5 after gold rose
more than 1 percent as investors piled into the safe-haven
resource on concerns in Ukraine.
Bendigo and Adelaide Bank Ltd were in a trading
halt after the Australian regional bank said it plans to buy
state-owned Rural Finance Corporation of Victoria for A$1.78
billion, a move it said would quadruple the size of its rural
New Zealand's benchmark NZX 50 index fell 0.5
percent or 27.3 points to 5,205.6.
(Reporting by Thuy Ong; Editing by Shri Navaratnam)