* Banks slip as investors continue to book profits
* Miners sink as iron ore supplies outpace demand
* UGL drops after only one final bid for real estate arm
(Adds analysis, quotes, stocks on the move)
By Thuy Ong
SYDNEY, May 19 Australian shares fell 0.9
percent on Monday, pulled down by blue chip banking and mining
stocks in muted trade as iron ore and Chinese steel futures
The 'Big Four' banks dragged lower with Commonwealth Bank of
Australia and Westpac Banking Corp both losing
0.9 percent. Three of the 'Big Four' banks had touched record
highs earlier in May on solid earnings results.
"I think in the absence of any earnings information the
market probably has drifted a bit," said John Milroy, investment
adviser at Macquarie Bank. "I think it will remain choppy until
we get some clear indications or more comfort around some of
these high multiples. The key thing for a lot of investors here
are these prices are a bit rich - is it being justified by
Miners were pulled lower as Chinese steel futures touched a
record low and iron ore fell 3 percent as supply outpaced
fragile demand in the world's top market for both commodities,
where lower economic growth has hit consumption.
Bellwether miners BHP Billiton Ltd and Rio Tinto
Ltd dropped 1.4 percent and 2.5 percent respectively.
Elsewhere, Australian engineering and property management
firm UGL Ltd received only one final bid for its real
estate arm, leaving question-marks over its long-standing plans
to sell the unit for about A$1.2 billion, a source told Reuters
on Monday. Shares in UGL tumbled almost A$1 or 13 percent to a
2-1/2 week low of A$6.63.
The S&P/ASX 200 index lost 46.3 points to 5,432.7 by
0140 GMT with a total of 148.8 million shares traded compared to
a daily moving average of 601.9 million shares so far this year.
Among energy stocks, Santos Ltd lost 2 percent and
Australia's top oil and gas producer Woodside Petroleum Ltd
was down 1.2 percent.
Shares in mining supplier Bradken Ltd tumbled 4.6
percent to near 5-year lows of A$3.74 after saying it will
reorganise its manufacturing arm, with a one-off charge of
around A$54 million before tax in FY 2014.
Discovery Metals Ltd soared 25 percent after saying
the company and its lenders have agreed to reduce the company's
existing interest-bearing debt by $59 million.
New Zealand's benchmark NZX 50 index slipped 0.2
percent to 5,177.3, led by a near 4 percent slide in OceanaGold
, as investors booked profits on the gold producer's
recent gains which took its share price to a near two-month high
late last week.
The NZX 50 is hovering slightly below an all-time high of
5,232.9 reached on May 5 and has been edging higher for the
better part of a year, underpinned by an improving economy.
(Reporting by Thuy Ong, additional reporting by Naomi Tajitsu
in Wellington; Editing by Eric Meijer)