Australia: Shares fall as disappointing retail sales add to economy fears

[SYDNEY] Australian shares fell for a fourth consecutive session on Thursday as weak retail sales and trade data stoked concerns about the economy.

Retail sales were flat, missing forecasts of slight growth, while the country's balance of goods and services was a bigger deficit than expected, official figures for April showed, indicating two earlier interest rate cuts in 2015 have failed to have an impact.

Even still, the Reserve Bank of Australia on Tuesday kept its policy rate on hold and gave little indication it will ease again in the near future. "(The Reserve Bank governor) hasn't got much further to go, in terms of how much further he can come down," said Quay Equities managing director David Reynolds.

Concerns about whether Greece can strike a deal with Europe that can save it from default were also keeping investors cautious, Reynolds added.

By 0226 GMT, the S&P/ASX 200 index was down 19.2 points or 0.3 per cent at 5,564.4, its lowest intraday level since Jan 29.

The benchmark has now lost 7 per cent since mid-April.

Banks, which write more home loans and offer more competitive dividend yields when rates go down, led the market lower.

National Australia Bank fell 0.5 per cent while Australia and New Zealind Banking Group dipped 0.3 per cent and Westpac Banking Corp and Commonwealth Bank of Australia both eased 1 per cent.

Large resources stocks also backtracked.

BHP Billiton fell nearly 1 per cent while iron ore producing rival Fortescue Metals Group dropped 2.3 per cent, while Rio Tinto gave up 0.2 per cent.

Africa-focused diversified resources explorer Syrah Resources tumbled 8.5 per cent.

Energy stocks followed oil prices lower. Woodside Petroleum declined 0.7 per cent, Oil Search dropped 0.8 per cent and refiner-retailer Caltex Australia was down 1.5 per cent.

Supermarket operators were also weaker. Wesfarmers, owner of No.2 grocer Coles, lost 0.9 per cent and larger Woolworths was down 0.1 per cent.

Grocery supplier Metcash tumbled 17 per cent, the biggest loser on the market, after warning it would write down its assets by US$500 million to reflect competitive trading conditions.

New Zealand's benchmark NZX50 share index was flat at 5,858.24, with support for selected top stocks and small-cap companies.

Telecommunciations operator Spark was down 1.4 per cent, overshadowing lesser gains for Fletcher Building, Contact Energy and Auckland International Airport.

The strongest rise was for small fast-food operator Burger Fuel,which bounded 23 per cent higher after announcing a partnership to enter the US market.

Restaurant Brands, which operates KFC, Pizza Hut, Starbucks and Carl's Junior franchises, hit a record high after reporting a strong rise in first-quarter sales.

Consumer and retail stocks were firmer, with discount retail chain the Warehouse Group up 1.8 per cent and clothing retail Hallenstein up 4 per cent.

REUTERS