Australia shares ease in choppy trade, miners sag on weak metals prices

Reuters - UK Focus

(Adds analysis, quotes, stocks on the move)

SYDNEY, Nov 27 (Reuters) - Australian shares eased 0.1 percent in a choppy morning session on Wednesday, dragged down by the resources sector after metals prices fell overnight.

A flat performance on Wall Street, with the exception of the tech sector, provided few catalysts for buyers as investors in the U.S. took a back seat ahead of a Thanksgiving holiday.

Miners lost ground after copper finished slightly weaker and gold fell nearly one percent overnight.

Blue chips BHP Billiton Ltd declined 1 percent and Rio Tinto Ltd (Xetra: 855018 - news) gave up 1.3 percent, while bullion miners Kingsgate Consolidated Ltd and Silver Lake Resources Ltd slumped 8.1 percent and 6.5 percent respectively.

The S&P/ASX (Berlin: AUX.BE - news) 200 index fell 6.4 points to 5,350.6 by 0056 GMT. The benchmark has been trading mostly sideways for much of November as investors fret over when the U.S. Federal Reserve will begin to taper its massive bond-buying program. The index added 0.1 percent on Tuesday.

Tim Radford, global analyst at Rivkin Securities, said in a note that the market's recent consolidation is a sign it's preparing to resume the broader uptrend to above 5,400 points.

"Given the market's perception of risk is extremely low at the moment, we should anticipate investors will confidently bid equities higher through December."

Banking stocks supported the market with Australia and New Zealand Banking Group and Commonwealth Bank of Australia each adding 0.6 percent.

The 'Big Four' banks have had a stellar year with their share prices surging on record earnings and high dividend yields of between 4.7 percent and 5.5 percent. In comparison, general everyday depositor accounts yield annual rates of 3-4 percent.

Oddly, upbeat data showing the value of construction work done in Australia in the third quarter rose by 2.7 percent, almost six times above forecast, did little to excite the sector.

"Internal governance is continuing to trouble Leighton Holdings," said John Milroy, investment adviser at Macquarie Bank.

"In addition to that, what's happened at Woolworths (Frankfurt: WWR.F - news) last week has just weighed on the whole sector," he said, referring to the retailer's loss-making home improvement business Masters, which lost $139 million in 2014 and is forecast to breakeven only in 2016.

Last week, Leighton Holdings Ltd rejected Fairfax media claims of "damning evidence linking the property developer to allegedly corrupt payments" in British high court .

Leighton fell 0.8 percent while Lend Lease Corporation Ltd dipped 1.1 percent.

Whitehaven Coal Ltd (Other OTC: WHITY - news) declined 1.1 percent, retracing some of its gains from the previous session as the stock was deleted from MSCI (NYSE: MSCI - news) 's Australia Index.

New Zealand's benchmark NZX 50 index was flat at 4,790.5 points.


(Reporting by Thuy Ong; Editing by Shri Navaratnam)