[SYDNEY] Australian shares fell 0.7 per cent by mid-session on Friday, led down by the big banks ahead of US jobs and Chinese foreign exchange reserves data, and by consumer stocks on disappointing retail sales in December. New Zealand shares held steady.
The benchmark S&P/ASX 200 index was down 38.5 points at 4,941.9 as of 0206 GMT, reversing nearly a third of Thursday's gains. "People have been selling our banks - it's more of a macro play. They're shorting the (Australian) dollar and shorting the Australian banks. We are the global play on China," said Chris Weston, a dealer at IG Markets.
As a major exporter to China, Australia's markets are often used by investors as a proxy for China, as they have limited access to Chinese markets.
Investors were positioning ahead of China's foreign exchange reserves report due on Sunday, watching to see how big an outflow of capital there was in January. If the outflow was bigger than expected, markets will turn more volatile. "Anything linked to China will come off," Mr Weston said.
Among the consumer stocks, APN News & Media fell the most, down 7.5 per cent, after rival News Corp reported a drop in quarterly earnings for the fourth quarter in a row.
Resources stocks helped limit the market's losses, with top global miner BHP Billiton up 3.8 per cent, top Australian gold miner Newcrest Mining up 4.4 per cent and Alumina Ltd up 6 per cent.
Whitehaven Coal fell 6.7 per cent despite reporting a return to the black for the half year to December and flagging it expects coal prices to start recovering next year.
For more individual stocks activity click on New Zealand's benchmark S&P/NZX 50 index was virtually unchanged at 6.137.12 with investors treading water ahead of company earnings reports kicking off over the next few weeks.
The biggest gainers were Air New Zealand, up 3.0 per cent and Ryman Healthcare, up 1.8 per cent.
The biggest losers included Nuplex, down 2.4 per cent and Steel & Tube, down 1.4 per cent.