Australia shares drop for the second straight session

* Shares (Berlin: DI6.BE - news) down 1.1 pct

* Banks, CSL (Other OTC: CMXHF - news) , Woolworths among biggest losers

* Newcrest, Orica, M2 Group (Other OTC: MTCZF - news) , Recall Holdings among gainers

* 153 shares down, 33 up, 14 unchanged (Adds analysis, quotes, stocks on the move)

By Swati Pandey and Naomi Tajitsu

SYDNEY/WELLINGTON, April 29 (Reuters) - Australian shares extended falls to more than 1 percent on Tuesday on a broad-based sell-off across all sectors, and a firmer Aussie dollar hit miners and companies with U.S. dollar earnings.

Stop-loss selling, which triggers a sale when a stock reaches a certain price, was sparked after the China futures market opened, analysts said.

The S&P/ASX 200 index fell 65.04 points to 5,883.5 by 0148 GMT. The benchmark ended down 0.6 percent on Monday, after failing for the fourth time since early March to breach the 6,000-points barrier.

"There was a big sell-off on the ASX when the Chinese futures market opened. If you have a look at how sharp it was on the ASX it does look like stop-loss selling," said Evan Lucas, market strategist at IG Markets.

"We see downside risks. Price premiums in the banks looks to be starting to be questioned."

Since the Reserve Bank of Australia (RBA) cut its cash rate to 2.25 percent in February the ASX benchmark has been moving in a 5,750-5,996 range. Analysts expect the market to head back towards the bottom of that band if the RBA keeps rates steady at its monetary policy meeting next Tuesday.

Westpac, ANZ and NAB will post half-yearly results next week. Macquarie will report next Friday. They were all down between 1.2 and 3 percent.

Companies with heavy U.S. exposure or U.S. dollar earnings such as CSL, QBE, James Hardie and Resmed (NYSE: RMD - news) fell 1.3-3 percent as the Aussie dollar rebounded.

Miners Rio Tinto and Fortescue fell 1-3 percent.

IAG fell over 6 percent after downgrading full year insurance margin guidance.

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New Zealand's benchmark NZX50 index was little changed at 5,775.68 drawing support from slight gains in consumer- and construction-related shares.

SkyCity Entertainment rose roughly 0.5 percent, recovering from a sell-off on Tuesday when the casino operator announced that one of its Australian casinos would be subject to a new levy from July.

Construction materials maker Fletcher Building (NZSE: FBU.NZ - news) edged up 0.6 percent, while outdoorwear maker Kathmandu climbed 1.4 percent.

Further gains were offset by a 7.0 percent tumble in Genesis Energy, which plumbed a six-month low of NZ$2.00 after the energy retailer cut its full-year profit forecast due to low global oil prices and lower electricity and gas volumes.