Australian share rally pauses as banks slip, NZ extends gains

(Adds analysis, quotes, stocks on the move)

By Gyles Beckford and Ian Chua

SYDNEY/WELLINGTON, Jan 28 (Reuters) - Australia's share market, which has climbed the past four days, eased on Wednesday as investors took profits on some of the best performers such as the major banks.

The S&P/ASX 200 index slipped 15.7 points, or 0.3 percent, to 5,531.4 by 0208 GMT. It rallied 4.5 percent in the past four sessions to a two-month high.

The big four banks were flat to slightly lower, with shares in Commonwealth Bank retreating to A$87.45 from a record high of A$87.65 on Tuesday.

"We've had a fairly good run... but now those global jitters are coming back to haunt markets. Earnings in the U.S. were reflecting that," said Stan Shamu, strategist at IG Markets.

Shamu pointed to sobering news from U.S. mining equipment maker Caterpillar Inc (NYSE: CAT - news) , which cut its 2015 profit outlook and warned the plunge in oil prices would hurt its energy equipment business.

Indeed, falling oil and iron ore prices have taken a heavy toll in mining and energy shares and confidence in the sector is unlikely to return until commodity prices stabilise, analysts said.

In contrast with Australia, New Zealand shares extended their record-breaking run on Wednesday, reversing opening weakness, with the benchmark NZX-50 index up 0.6 percent at 5,775.9. It hit an all-time high of 5,779.6.

The market's number two stock telecommunications company Spark remained ahead of the pack, up 2.6 percent to NZ$3.48, a high last seen in October 2007. The stock has risen 11.7 percent this year, bolstered by its yield and earnings outlook.

Other leaders underpinning gains were Contact Energy (NZSE: CEN.NZ - news) , up 2.5 percent to a six-year high of NZ$6.95, and healthcare equipment maker Fisher and Paykel Healthcare , up 1.6 percent to NZ6.26, a one-month high, as the softer NZ dollar is seen lifting earnings.

Financial services and banking stock Heartland gained 6.7 percent to a record NZ$1.27 after it raised its profit forecast.

Among decliners were casino operator Sky City down 1.9 percent to NZ$4.01, and retailer Kathmandu down 1 percent to N$1.96.