Australia shares edge higher as banks buoy, takeover target Aquila rises

Reuters - UK Focus

* Banks help market eke out small gain, Aquila (Paris: FR0010340711 - news) soars

* Miners fall as copper drops to 1-month low

* Investors cautious ahead of employment data due onThursday (Adds analysis, quotes, stocks on the move)

By Thuy Ong and Gyles Beckford

SYDNEY/WELLINGTON, June 11 (Reuters) - Australian sharesinched up on Wednesday, as gains for banking stocks slightlyoutweighed dips for mining and defensive sectors as WallStreet's flat finish limited leads.

The S&P/ASX 200 index added 5.7 points, or 0.1percent, to 5,469.7 by 0225 GMT. The benchmark edged 0.1 percenthigher on Monday.

A measure of Australian consumer sentiment steadied in Juneas the shock from May's unpopular federal budget began to fadeand worries about family finances and the near-term economicoutlook eased a little.

Westpac Banking Corp added 0.3 percent, as didAustralia and New Zealand Banking Group.

Shares in takeover target Aquila Resources Ltd rose2.7 percent to A$3.61, their highest since May 2012, after ablock trade of shares went through at a price 10 percent higherthan Chinese state-owned Baosteel Resources has offered for thecompany.

Copper dropped to a one-month low on Tuesday as aninvestigation into metal financing in China prompted concernthat a crackdown could hit trade in the metal.

BHP Billiton Ltd and Rio Tinto Ltd (Xetra: 855018 - news) bothlost 0.9 percent. Elsewhere, Lynas Corporation Ltd fell3.5 percent

Evan Lucas, market strategist at IG (LSE: IGG.L - news) , said metal prices were moving sideways ahead of Australia May jobs data dueon Thursday.

"The numbers will give a really good indication of howpeople have taken the budget," he said. "From the market'sperspective, the budget is not as bad as some people arereporting - which is why people are holding out becauseeverything is looking just slightly expensive."

Among defensive stocks, consumer retail staple WoolworthsLtd lost 0.7 percent and Sonic Healthcare Ltd slipped 0.2 percent.

Downer EDI Ltd sank 10.4 percent to 2-1/2 monthlows of A$4.74 after the company said its Goonyella Riversidemine contract has been terminated, with an impact onwork-in-hand of approximately A$360 million.

Flight Centre Travel Group Ltd jumped 1.9 percentafter saying it is expected to achieve underlying profit beforetax of A$370 million-A$380 million for the year to June 30.

New Zealand's benchmark NZX 50 index slipped 0.1percent or 7.1 points to 5,172.3, in quiet trade as investorsremain cautious ahead of the central bank's rate decision onThursday.

New Zealand software developer ikeGPS Group Ltd isconsidering raising up to NZ$25 million through an initialpublic offering to fund growth in the United States. (Editing by Richard Borsuk)

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