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Australia shares nudge higher, retail sales miss forecasts

Wednesday, 3 Oct 2012 | 10:50 PM ET

MELBOURNE, Oct 4 (Reuters) - Australian shares were up 0.2 percent on Thursday as banks rose while miners fell, with sentiment dented by soft retail sales figures for August and declines in oil and copper prices.

Top banks continued this week's post rate-cut gains, led by a 1.2 percent rise in Westpac Banking Corp

. The central bank cut rates to a three-year low on Tuesday.

Miners extended their downward trend, with BHP Billiton

down 1.5 percent and Rio Tinto

slipping 0.8 percent.

Australian retail sales edged up a meagre 0.2 percent in August, with weakness in household goods and clothing pointing to restraint in discretionary spending that adds to the case for further cuts in interest rates.

"It's consistent with the story that consumers are saving and paying down debt," said Su-Lin Ong, senior economist at RBC Capital Markets. "It will be especially challenging if the labour market does start to soften and that's our base case. It's consistent with what we expect to be a move to a sub-trend pace of growth in the second half of the year."

She expected a further 50 basis points easing by mid 2013.

The benchmark S&P/ASX 200 index

was up 8 points at 4,445.9 by 0237 GMT. The index had hit a 14-month high of 4,454.6 on Wednesday.

New Zealand's benchmark NZX 50 index

fell 0.1 percent to 3,885.5 points. STOCKS ON THE MOVE:

* Top supermarket operator Woolworths Ltd

rose 1.1 percent to A$29.23. The retailer is set to spin off some of its property portfolio into a fund and raise about A$500 million ($510 million) in equity as early as Friday, a source with direct knowledge of the matter said.

* Discovery Metals

was placed on trading halt after China's Cathay Fortune Corp (CFC), founded by billionaire Yu Yong, offered $847 million for control of the firm

.

(Reporting by Miranda Maxwell; Editing by John Mair and Muralikumar Anantharaman)

((miranda.maxwell@reuters.com)(Reuters

Messaging:)(miranda.maxwell.reuters.com@reuters.net)(+61-3

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