Australia shares slip on resource stocks; US payrolls, China data caution

Reuters - UK Focus

(Adds analysis, quotes, stocks on the move)

SYDNEY, Jan 10 (Reuters) - Australian shares fell 0.2percent in early trade as a lack of leads from Wall Street and afall in commodity prices sidelined investors ahead of Chinesetrade and U.S. nonfarm payrolls data due later on Friday.

Miners weighed on the index as copper prices fell totwo-week lows overnight and Chinese steel futures drifted tonear contract lows as poor demand in the world's top consumerweighed on prices.

Heavyweights BHP Billiton Ltd and Rio Tinto Ltd (Xetra: 855018 - news) lost 1.6 percent and 2.2 percent each. World no. 4 ironore miner Fortescue Metals Group dropped 3.2 percent.

"Recent softness in resource stocks has been at least partlyattributable to growing concerns that the pace of economicgrowth in China has been softening," Ric Spooner, chief marketanalyst at CMC Markets, said in a note.

The S&P/ASX 200 index fell 10.2 points to 5,314.2 by0047 GMT, hovering 140 odd points below the 4-1/2 year high of5,457.3 hit on October 28. The benchmark rose 0.2 percent onThursday and is set to fall 0.7 percent for the week, snappingthree weeks of consecutive gains.

The banking sector held on to gains, helping to offsetbroader market losses. Bluechip Westpac Banking Corp and Australia and New Zealand Banking Group added 0.7percent and 0.9 percent respectively. Mid-tier Bank ofQueensland Ltd edged 0.3 percent higher.

U.S. stocks ended little changed on Thursday in a choppysession ahead of Friday's payrolls report, which may provide aclue to whether the Federal Reserve will cut quantitative easingagain at its meeting this month.

Other analysts said trading would also be cautious ahead ofkey China trade data due out at 0200 GMT.

Meanwhile, Twenty First Century Fox Ltd dropped 5.1 percent after the company said it would bedelisting from the ASX.

Neon Energy Ltd crashed 71.9 percent to A$0.08, itslowest price since 2003 after the company said testing wascompleted at a gas reservoir off Vietnam, though poordeliverability and a high carbon dioxide content meantdevelopment would be unlikely.

Elsewhere, Integrated Research Ltd climbed 11.9percent to five-month highs after the company said it expectsits half year profit to be in the range of A$4.4 million toA$4.8 million, higher than the corresponding prior period.

"The big increase in stock market price earnings valuationsin developed economies over 2013 means that markets are nowpotentially very sensitive to misses on earnings expectations,"said Spooner.

New Zealand's benchmark NZX 50 index rose 0.3percent to 4,831.1.

(Reporting by Thuy Ong; Editing by Eric Meijer)

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