Australia shares hold soft tone on disappointing earnings, NZ inches lower

[SYDNEY] Australian shares faltered on Thursday, as earnings from Rio Tinto and Suncorp fell short of investor expectations while the country's narrower trade surplus also failed to inspire.

The S&P/ASX 200 index fell 7.8 points, or 0.1 per cent, to 5,736.4 at 0226 GMT. The benchmark edged 0.5 per cent lower on Wednesday.

Rio Tinto dipped 2.2 per cent after the global miner reported a 152 per cent leap in half year underlying earnings but still missed analyst expectations.

Spot iron ore prices slipped on concerns the rally fuelled by steel producers replenishing their stocks would not be sustained.

The benchmark of mining stocks slipped more than a per cent at one point.

"Rio results last night was a slight miss and Suncorp was also a slight miss", said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

"So even though they are paying good dividends, and in Rio's case doing a substantial buyback, the market expected a bit more so in that context, both those sectors are in a bit of a slump," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

Australia's second-largest insurer by market share Suncorp Group also reported a rise in annual profit, but slightly below expectations. The company's shares plunged as much as 7 per cent to a three-month low.

Other insurers including Insurance Australia Group and QBE Insurance Group followed the downward trend, falling as much as 3.3 per cent and 2 per cent lower.

Meanwhile, National Australia Bank and Commonwealth Bank Of Australia stepped up about 0.3 per cent and 0.4 per cent.

The country's balance of goods and services in June showed a narrower surplus of A$856 million, down from A$2 billion in May. Australia has been posting monthly trade surpluses helped by strong commodity exports but the export outlook is starting to be clouded by a rising Australian dollar.

New Zealand's benchmark S&P/NZX 50 index fell 10.06 points, or 0.1 per cent, at 0226 GMT to 7,738.25.

The bourse was little changed as gains in information technology stocks were offset by the falling consumer discretionary sector.

Even though consumer discretionary stocks were the biggest drag, specialist outdoor retailer Kathmandu Holdings Ltd was the best performer in the benchmark, up as much as 2.9 per cent, after reporting a rise in annual sales.

REUTERS