Australia shares held back by banks, miners also a drag

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SYDNEY/WELLINGTON, May 22 (Reuters) - Australian shares were flat on Friday as gains in energy stocks were offset by renewed weakness in the financial sector, while miners put up a choppy performance.

The S&P/ASX 200 index slipped 0.04 percent, or 2.2 points to 5,660.1 by 0218 GMT. It was down about 1.3 percent so far this week.

The big four banks were in the red led by a 0.5 percent fall in Commonwealth Bank amid persistent concerns about their earnings outlook.

Commonwealth Bank and ANZ have dropped by around 14 percent from their all-time highs set in late March-early April. Shares (Berlin: DI6.BE - news) in Westpac have slid nearly 20 percent from a record high set in April.

"None of the banks have confirmed a solid floor yet, but it is clearly approaching. Be ready for a bounce that should see the ASX back in the green as well," said Evan Lucas, strategist at IG (LSE: IGG.L - news) .

"The issue as I see it is fundamentally based on current estimates, the big four banks still appear to be offering a premium price."

Faring better on Friday were mining and energy shares - although miners were choppy - thanks to an overnight rebound in oil and iron ore prices.

Mining giant Rio Tinto (Xetra: 855018 - news) gained 0.1 percent, while BHP Billiton (NYSE: BBL - news) put on 0.3 percent.

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New Zealand stocks were modestly firmer, supported by gains in some of the leading stocks. The benchmark NZX-50 index rose 0.3 percent, or 15.5 points, to 5,784.8.

Pay television operator Sky TV was up 2.7 percent to a six-month high, with investors seen picking the stock on attractive-looking price and yield.

Retirement village operator Ryman Healthcare climbed 0.4 percent after reporting a solid lift in full year profit, while Fisher and Paykel Healthcare was up 0.5 percent ahead of next week's result.

The Fonterra Shareholders Fund, an investment fund based on the dividends of the dairy giant, rose 0.5 percent, pulling away from a lifetime low set earlier this week. (Reporting by Ian Chua in SYDNEY and Gyles Beckford in WELLINGTON)