Australia shares fall for a second day; earnings disappoint

* Shares (Frankfurt: DI6.F - news) down 0.24 pct on Friday

* Australian shares valuation higher that 10-year average

* 77 shares up, 111 shares down, 12 unchanged (Adds analysis, quotes, stocks on the move)

By Swati Pandey and Naomi Tajitsu

SYDNEY/WELLINGTON, Feb 20 (Reuters) - Australian shares fell for a second straight session on Friday, nearly wiping out the week's gains as lower commodity prices and corporate earnings continued to disappoint.

Medibank Private, Australia's leading health insurer, fell about 4 percent, the most since its listing last year, after it warned that rising healthcare costs were causing customers to cut back on insurance.

Uncertainty in the euro zone continued over the debt negotiations with Greece, adding to investor caution, analysts said.

The S&P/ASX 200 index fell 0.22 percent or 12.73 points to 5,891.5 by 0120 GMT. The benchmark eased 0.2 percent on Thursday.

Analysts expected broad-based selling to continue into afternoon session ahead of the weekend. They said volumes remained high despite Lunar New Year holidays in China and some other Asian countries.

The index, which is up about 9 percent so far this year, is expected to give up gains as valuations remain high. It is trading at 14.2 times its 12-month forward earnings, higher than its 10-year average.

Fund manager Platinum Investment Management fell as much as 15.4 percent after half-year net profit fell about 4 percent.

Transpacific Industries and STW Communications also slumped on weak earnings.

Energy-related stocks fell with Santos, Woodside and Origin Energy down 1-3 percent.

Major miner BHP Billiton (NYSE: BBL - news) was down 0.5 percent while Rio Tinto (Xetra: 855018 - news) rose 0.7 percent. The Big Four banks including Commonwealth Bank and Westpac fell 0.3-0.5 percent.

New Zealand's benchmark NZX50 index edged up 24.3 points or 0.4 percent to 5,750.55, as an ongoing rise in Xero (Frankfurt: 0XE.F - news) helped the market claw back from a two-week low of 5,717.05 hit in earlier trade.

The online accounting software developer jumped 8.1 percent to a four-month high of NZ$20.39 ($15).

Online board member services developer Diligent rose 2.5 percent to NZ$6.15, its highest since August 2013 as gains in Xero generated demand for technology shares.

Contact Energy (NZSE: CEN.NZ - news) fell 1.3 percent to a two-month low extending losses after weak earnings. (Editing by Eric Meijer)