Australia shares slide as caution reigns, NZ fall most in 4 weeks

[SYDNEY] Australian shares fell on Friday, on track to snap three straight days of gains, as investors grew cautious about upcoming earnings and the impact of a stronger currency as well as second quarter US economic growth data.

The S&P/ASX 200 index fell 1.4 per cent, or 83.01 points to 5,702.4 by 0330 GMT, on track to shed 0.4 per cent for the week. The benchmark closed up 0.15 per cent on Thursday.

Oil prices edged away from eight-week highs on Friday after five straight days of gains.

Markets are focused on second quarter US gross domestic product data due later in the day for clues on the strength of the US economy. Economists expect the data to show US growth picking up to 2.6 per cent from 1.4 per cent in the January-March quarter.

Financial and material stocks led Friday's losses.

"Knowing how energy has been over the recent past, I think any time where investors are unable to liquidate positions at call creates a situation where they may want to keep risk off at the moment," said Kurt Mayell, Asian equity hedge analyst at CMC Markets Asia Pacific Pty Ltd.

"We do have several high impact data points due out tonight including US GDP data, so traders locally are happy to keep some risk off leading into the weekend."

Adam Tout, a senior analyst at CPS Capital in Perth, said the sell-off could also be due to caution ahead of next week's earnings season, as well as a stronger Australian dollar.

The Aussie dollar has advanced strongly as its US counterpart floundered through most of this week, soaring to a 26-month high on Thursday. It was up 0.7 per cent for the week.

The financial index fell as much as 2 per cent, posting its biggest intraday per centage loss in over five weeks, with the 'Big Four' banks losing between 1.6 per cent and 2.2 per cent.

ANZ, Westpac Banking and National Australia Bank all slid to over one-week lows.

Miners BHP Billiton and Rio Tinto both slipped as much as 1.8 per cent, as iron ore prices dropped.

China's steel rebar futures eased after three days of gains due to underlying concerns about a weak demand outlook amid increasing output at mills.

New Zealand's benchmark S&P/NZX 50 index fell 0.9 per cent, or 67.32 points to 7,644.49 as of 0330 GMT, and down 0.3 per cent for the week.

The index posted its biggest intraday percentage drop in four weeks, with losses spread across all sectors.

REUTERS