Australia & NZ share rally pauses, energy stocks down

(Adds analysis, quotes, stocks on the move)

By Ian Chua and Naomi Tajitsu

SYDNEY/WELLINGTON, Feb 5 (Reuters) - Australia's share market was flat on Thursday, pausing after 10 straight sessions of gains as renewed weakness in oil prices dragged energy stocks lower.

The S&P/ASX 200 index was a wafer-thin 1.66 points, or 0.03 percent higher, at 5,779.0 by 1343 GMT, holding below a near seven-year peak of 5,805.10 set on Wednesday.

The market had been bolstered by an interest rate cut this week and growing hopes that a rout in commodity prices may have ended. However, oil prices took a fresh spill overnight as record high U.S. inventories cut short a four-day rally.

Woodside Petroleum (Other OTC: WOPEF - news) , Santos, Oil Search , Beach Energy (Dusseldorf: BPS.DU - news) all fell between 2 and 4 percent, taking the S&P/ASX 200 Energy index down 2.4 percent.

"People at one stage were chasing the rebound in the oil price thinking it has probably bottomed. But the reality is the global glut is still very real, so we're going to see a bit of volatility in this sector," said Lucinda Chan, divisional director at Macquarie Equities.

Among the big local banks, Westpac hit a record high of A$36.46, while CommBank hovered just under an all-time high of A$91.94 set a day ago.

National Australia Bank was flat after posting a 6 percent gain in first-quarter cash profit.

Shares (Berlin: DI6.BE - news) in neighbouring New Zealand were equally uninspired.

New Zealand's benchmark NZX50 index was little changed at 5,787.03 as gains in companies which stood to benefit from a further drop in global oil prices offset losses in those which are seen struggling.

Air New Zealand rose roughly 2 percent to NZ$2.59, recovering from a 1 1/2-week low of NZ$2.54 hit on Wednesday as the latest tumble in oil was expected to lower the national air carrier's fuel costs.

Meanwhile, lower oil prices stung energy-related companies, with Meridian falling 1.8 percent to NZ$1.92, retreating from a lifetime high of NZ$2.00 hit on Wednesday, while Mighty River Power (Stuttgart: MRY.SG - news) slid 2 percent to NZ$3.40.

New Zealand Oil and Gas fell 1.54 percent to NZ$0.64, retreating from an eight-week high of $0.66 hit on Wednesday as the latest drop in oil prices weighed on the oil explorer.