Australia shares lifted by bluechip stocks, gains capped by Wall St, China

Reuters - UK Focus

(Adds analysis, quotes, stocks on the move)

SYDNEY, Jan 7 (Reuters) - Australian shares rose 0.3 percenton Tuesday, led by bluechip stocks, although sentiment wasdampened as Wall Street dipped on a mixed bag of economic dataand investors remained cautious about China's growth.

The 'Big Four' banks lifted the market, continuing theirstellar run from 2013. Top (Taiwan OTC: 8419.TWO - news) lender the Commonwealth Bank ofAustralia added 0.3 percent while National AustraliaBank rose 0.4 percent.

Consumer retail staple Wesfarmers Ltd climbed 1.1percent and top telecommunications provider Telstra Corporation (Berlin: TSTA.BE - news) Ltd rose 0.5 percent.

"Our sense is we see the market back at the 5,700 level bythe end of the year," said John Milroy, private client adviserat Macquarie Private Wealth.

"We think there's a real chance of the ASX200 listedcompanies having a much better revenue outcome than the marketexpects."

The S&P/ASX (Berlin: AUX.BE - news) 200 index was last at 5,700 in 2008 andis still well below its all-time high of 6851.5, touched inNovember 2007. The index was trading 14.5 points higher onTuesday morning (Frankfurt: TDM.F - news) at 5,339.4, after a 0.5 percent fall in theprevious session, its biggest one-day drop in three weeks.

The benchmark has recovered from a four-month low of 5,028.2touched on Dec. 12, and is now hovering some 100 points below a4-1/2 year high of 5,457.3 hit on Oct. 28.

U.S. stocks slipped on Monday after a mixed batch ofeconomic reports that showed a slowdown in growth in the sector and a rebound in new orders for factory goods,dampening local sentiment.

Heavyweight miners dipped after Chinese steel futures fellfor a second straight session to hit their lowest in nearlyseven months on seasonally tepid demand.

The China HSBC/Markit services sector Purchasing Managers'Index (PMI) dropped to 50.9 in December from 52.5 in November,with business expansion the slowest in six months. China isAustralia's top export market.

BHP Billiton Ltd and Rio Tinto Ltd (Xetra: 855018 - news) fell0.6 percent and 1.6 percent respectively. Iluka Resources Ltd (Other OTC: ILKAF - news) lost 0.7 percent and OZ Minerals Ltd fell 0.8percent.

Elsewhere, Baraka Energy slumped 40 percent afterit disputed the validity of Statoil (Xetra: DNQ.DE - news) 's 2014 work programs on twopermits in the Northern Territory, which it said would need tobe resolved by arbitration.

Dairy group Murray Goulburn said it expects a regulatorydecision on its offer for Australia's Warrnambool Cheese andButter Factory Holdings Co by the end of February, ashorter time-frame than initially expected. Warrnambool was down 0.1 percent.

New Zealand's benchmark NZX 50 index rose 0.3percent or 14.8 points to 4,780.1.

(Reporting by Thuy Ong; Editing by Richard Pullin)

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