Australia shares give up gains on Westpac earnings disappointment
* Westpac H1 result disappoints
* Oil slide weighs energy stocks
* Other sectors lifted by rate cut hopes (Adds analysis, quotes, stocks on the move)
SYDNEY/WELLINGTON, May 4 (Reuters) - Australian shares gave up early gains and fell on Monday after disappointing earnings from the country's second-largest bank fuelled concerns the finance sector is nearing the end of a multi-year run of record profits.
Westpac Banking Corp missed forecasts with a flat first-half profit and its dividend grew at its slowest in nearly four years, leading to concerns its rivals will show similar strain when they report over the next week.
Shares (Berlin: DI6.BE - news) in the A$110 billion lender fell 4 percent, their biggest decline since November, to a two-month low.
After following overseas markets higher at the open, the S&P/ASX 200 index was down 20.9 points or 0.4 percent at 5793.5 by 0242 GMT.
"The Westpac result has weighed heavily on the market," said IG Markets strategist Stan Shamu.
"Everyone's a little bit sceptical about the bank earnings season. People aren't convinced that they can keep growing earnings and grow dividends the way they used to, and perhaps valuations shouldn't be where they are."
Rival Australia and New Zealand Banking Group, which reports interim results on Tuesday, dipped 2.4 percent while Commonwealth Bank of Australia (Other OTC: CBAUF - news) and National Australia Bank both fell more than 1 percent.
Energy stocks also fell, after oil price dipped on news Iraq exports hit a record high.
Oil Search and Woodside Petroleum (Xetra: WOPA.DE - news) dropped 0.7 percent and 0.2 percent. Resources contractor Worley Parsons sank 9 percent after announcing a writdown and 2,000 staff redundancies.
Iron ore miners fared better after the price of the key steel-making ingredient remained off their record lows. BHP Billiton rose 1.5 percent and Rio Tinto (Xetra: 855018 - news) firmed 2 percent.
Consumer staples firms also rose amid expectations of a rate cut on Tuesday, with No.1 supermarket operator Woolworths and Wesfarmers, which owns its rival Coles, both up 1.5 percent.
New Zealand's benchmark NZX50 index trimmed early losses to last trade down 0.4 percent at 5,776.9, led by falls in most leading stocks like telecommunications company Spark and power company Contact Energy (NZSE: CEN.NZ - news) , both down 1 percent.
Insurer Tower was down 1.9 percent as it remained under pressure following last week's guidance that it expected a small first-half loss because of extra Canterbury earthquake claim costs.
Accounting software firm Xero (Frankfurt: 0XE.F - news) rose 1.2 percent while its newly-relisted rival MYOB debuted at a 6 percent premium to its issue price. (Reporting by Byron Kaye and Gyles Beckford; Editing by Kim Coghill)
