May 23, 2018 / 2:51 AM / 3 months ago

Australian shares slip on Santos slump; NZ falls on Fonterra

* Aussie shares on track for fifth session of loss

* Santos biggest drag on the benchmark

* Fonterra fall leads NZ lower

By Aditya Soni

May 23 (Reuters) - Australian shares dipped on Wednesday, with energy stocks leading declines after oil and gas producer Santos rejected U.S.-based firm Harbour Energy’s $10.8 billion takeover offer.

The S&P/ASX 200 index fell 0.2 percent or 12.50 points to 6,029.40 by 0245 GMT. The benchmark declined 0.7 percent on Tuesday.

Santos on Tuesday ended talks with Harbour Energy and rebuffed its bid saying it undervalued the firm in the context of the recent surge in oil prices.

The decision shocked analysts and sent the Adelaide-based company’s shares tumbling 9.2 percent on Wednesday, its biggest intraday percentage fall in nearly one and a half years.

The news, coupled with lower oil prices on Wednesday, also led to weakness in the wider sector, with the energy index slumping 2.8 percent to a two-week low.

However, Dale Raynes, Associate Director at CPS Capital, said the decline isn’t surprising given energy stocks’ recent strong run.

Oil prices edged lower on Wednesday as the market took a breather on expectations OPEC may raise supplies as early as June.

Woodside Petroleum Ltd fell 1.8 percent to its lowest since May 15, while Origin Energy Ltd slid 2.3 percent.

Healthcare stocks were also lower, hurt by an extended fall in biotherapeutics firm CSL Ltd, which dipped about 1.1 percent, and hospital group Healthscope which fell 2.5 percent.

Healthscope rejected two takeover approaches on Tuesday and said it will instead explore selling its properties.

The scandal-hit financials sector was on track for a fifth straight session of decline, having lost nearly a percent since the third round of Australia’s powerful inquiry into the industry began on Monday.

Top lender Commonwealth Bank of Australia (CBA) slipped 0.5 percent, while National Australia Bank Ltd fell 0.6 percent to its lowest in more than one and a half year.

CBA is selling its 37.5 percent stake in a Chinese life insurer to Japan’s Mitsui Sumitomo Insurance Co for 3.2 billion yuan ($502.67 million), in a bid to simplify its portfolio and focus on its core banking business.

Elsewhere, global miner Rio Tinto Ltd rose 0.4 percent. Rio confirmed on Wednesday it was in discussions to sell its interest in the world’s second largest copper mine to Indonesia’s Inalum for $3.5 billion. Across the Tasman sea, New Zealand’s benchmark S&P/NZX 50 index slumped 0.4 percent or 36.53 points to 8,576.79.

Consumer staples accounted for most of the losses, with Fonterra slumping 6.8 percent to a near two-year low.

Fonterra, the world’s biggest dairy exporter, cut its full-year profit and dividend forecasts as the company takes longer to pass on higher milk costs to its customers. (Reporting by Aditya Soni in Bengaluru; Additional reporting by Shanima A)

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