Australia shares slip to 2-month low, Oz Minerals plunges

(Adds stock moves, analyst comments)

SYDNEY, Dec 11 (Reuters) - Australian shares fell 0.2

percent to a two-month low on Wednesday morning, tracking a soft

lead from Wall Street ahead of the next Federal Reserve meeting,

while copper producer Oz Minerals (Stuttgart: OXR.SG - news) dragged on the market after a

disappointing production forecast.

Oz Minerals, Australia's third-biggest copper

producer, was down 14.7 percent at an 11-year low after earlier

diving as much as 31 percent.

Other stocks in the resources sector fell, with heavyweight

miners BHP Billiton Ltd losing 1.6 percent and Rio

Tinto Ltd shedding 0.7 percent.

The S&P/ASX 200 index fell 7.5 points to 5,136.1 by

0123 GMT.

The benchmark finished flat on Tuesday and has fallen from a

5-1/2 year high of 5,457.3 hit on Oct (KOSDAQ: 039200.KQ - news) . 28 as investors fret

about when the U.S. Federal Reserve will begin to reduce its

massive bond-buying programme.

The benchmark has shed 3.5 percent in December so far,

falling for seven out of the eight sessions traded for the

month.

"There really is very little news around to move markets,"

said Scott Schuberg, CEO at Rivkin Securities. "Which is why we

were walloped so hard by the QBE profit warning this week."

A handful of defensives also fell, with blood products maker

CSL Ltd (Other OTC: CMXHF - news) slipping 0.5 percent and consumer retail staple

Woolworths Ltd falling 0.4 percent.

Meanwhile, a measure of Australian consumer sentiment sagged

in December as uncertainty on the economic outlook and news of

potential job losses at some high-profile companies took a toll,

a setback to hopes for a revival in spending.

The retail sector lost ground with major department stores

Myer Holdings Ltd and David Jones Ltd shedding

1.9 percent and 0.7 percent, respectively.

Gold (Other OTC: GDCWF - news) miners, however, helped pare broader losses after

bullion traded near a three-week high. Newcrest Mining Ltd

climbed 9.4 percent and Regis Resources Ltd

jumped 5.3 percent.

Australia on Wednesday cleared the way for China's Yanzhou

Coal Mining Co to take full control over its Australian unit, by

removing conditions that were imposed on the state-owned company

in 2009. Shares in Yancoal Australia were in a trading

halt, at A$0.67.

Commonwealth Property Office added 2 percent after

being approached for an off-market takeover offer from Dexus

Property Group and CPPIB.

Elsewhere, QBE Insurance Group Ltd added 4 percent,

recovering from a recent rout in its share price after the

company issued a profit warning.

New Zealand's benchmark NZX 50 index was flat at

4,704.8.

(Reporting by Thuy Ong and Maggie Lu Yueyang; Editing by Chris

Gallagher)