Australia shares fall as investors book profits

* Shares (Berlin: DI6.BE - news) down 0.36 percent

* All sectors down but industrials

* 103 shares down, 83 up, 14 unchanged (Adds analysis, quotes, stocks on the move)

By Swati Pandey and Naomi Tajitsu

SYDNEY/WELLINGTON, March 5 (Reuters) - Australian shares fell for the third straight session on Thursday, dragged lower by large miners and banks as investors booked profits after the central bank left rates unchanged earlier this week.

The tone was cautious ahead of a European Central Bank meeting later on Thursday and U.S. non-farm payroll data on Friday. Investors ignored local retail sales and trade deficit data.

The S&P/ASX 200 index fell 0.4 percent, or 23.99 points to 5,877.6 by 0117 GMT, after hitting its highest level since early 2008 on Monday. The benchmark fell 0.5 percent on Wednesday.

The index is up 8.5 percent so far this year, but is on its way to post its poorest weekly performance since Jan. 16.

"Wednesday's GDP data hardly gave confidence to investors on the short term prospects for the economy," said Tristan K'Nell, head of trading at Quay Equities.

Gross domestic product (GDP) expanded by 0.5 percent in the fourth quarter, compared to the previous quarter when it rose by 0.4 percent.

"Given the cautious tone of the morning session, I expect this to continue with the market likely down modestly this afternoon," he added.

Overnight, U.S. stocks fell with the Dow Jones industrial average dropping 0.6 percent and the S&P 500 off 0.4 percent.

Large miners BHP Billiton (NYSE: BBL - news) and Rio Tinto (Xetra: 855018 - news) were down 1.6 percent and 1.8 percent, respectively, after a recent run-up.

Energy shares such as Oil Search, Woodside Petroleum and Horizon were up 0.7 to 3.8 percent after crude oil rose overnight.

Macquarie outperformed the financial sector after broker Bell Porter raised earnings and dividend forecasts, a day after the bank announced raising A$500 million to fund a $4 billion acquisition to buy planes from lessor AWAS.

Major banks including National Australia Bank and Commonwealth Bank of Australia (Other OTC: CBAUF - news) were down 0.2-0.8 percent.

New Zealand's benchmark NZX50 index fell 24.6 points or 0.4 percent to 5,848.43, as a failure to extend a lifetime high hit earlier in the week prompted more investors to book profits in blue-chip shares.

Losses were led by power generator and retailer Meridian , which fell 3.8 percent.

Telecommunications network operator Chorus fell 1.4 percent, pulling further away from a 1 1/2-year high hit last week, while telecoms retailer Spark fell 1.2 percent to NZ$3.25.

Building materials maker Fletcher Building (NZSE: FBU.NZ - news) , the country's No. 2 company, fell 1.1 percent to NZ$8.54. (Editing by Kim Coghill)