(Adds analysis, quotes, stocks on the move)
SYDNEY, April 4 (Reuters) - Australian shares shed 0.1 percent on Friday, pulled lower by the financial sector after Wall Street slipped overnight and investors opt for caution ahead of the U.S. payrolls report due out after local markets close.
Banks lost ground for another session, with Westpac Banking (Frankfurt: 854242 - news) Corp slipped 0.5 percent, Commonwealth Bank of Australia fell 0.3 percent, while mid-tier Bendigo and Adelaide Bank Ltd shed 0.1 percent.
The S&P/ASX 200 index slipped 4 points to 5,406.1 by 0021 GMT. The benchmark tacked on 0.1 percent on Thursday.
A handful of defensive stocks also drifted lower, with Wesfarmers Ltd down 0.5 percent while index heavyweight Telstra Corporation Ltd fell 0.2 percent.
The Australian market is trading some 60 odd points below the 5-1/2 year high of 5,462.3 points hit on March 7, as geopolitical tension over Ukraine and worries about slowing growth in China dampened investor sentiment.
"The Australian market has tracked steadily higher ever since hitting support levels at 5,300 point mid-March," said Tim Radford, global investment manager at Rivkin Securities.
The mining sector eked out modest gains to buoy the market from deeper falls. Fortescue Metals Group Ltd rose 0.7 percent, Iluka Resources Ltd (Other OTC: ILKAF - news) added 0.8, and Oz Minerals (Stuttgart: OXR.SG - news) Ltd jumped 2 percent.
"This run looks sustainable in the near-term as buying momentum across the Big Four banks gains traction and the big miners recover from recent China slowdown fear-driven selling," Radford said.
Hot Chili Ltd which owns copper multi-commodity projects in Chile, xx percent. A major earthquake of magnitude 8.2 struck off the coast of Chile on Tuesday.
Aspen Group Ltd soared 5.7 percent to A$1.31, a 2-1/2 month high after the company announced the sale of its Septimus Roe office building at a price of A$91 million, in line with its net carry value as of December 2013.
Department store operator David Jones Ltd lost 2.8 percent after CEO Paul Zahra reiterated to local media that formal talks about a merger with rival Myer Holdings Ltd are months rather than weeks away.
Australia's competition regulator said it would let Transurban Group (Other OTC: TRAUF - news) , the country's biggest toll road owner, buy Queensland state-owned toll road owner Queensland Motorways Ltd, concluding that a deal would not substantially reduce competition. Shares in Transurban added 0.4 percent.
U.S. stocks slipped overnight as caution set in ahead of Friday's monthly jobs data.
New Zealand's benchmark NZX 50 index slipped 0.1 percent to 5,114.5.
(Reporting by Thuy Ong; Editing by Eric Meijer)