Australian shares slip on lower oil prices, NZ outperforms

By Ian Chua and Naomi Tajitsu

SYDNEY/WELLINGTON, Jan 13 (Reuters) - Australian shares fell for a second session on Tuesday with investors giving some of the mining and energy shares a wide berth amid weakness in oil and iron ore prices.

The benchmark S&P/ASX 200 index was down 0.6 percent, or 32.2 points, at 5,390.5 at 0156 GMT, extending a 0.8 percent decline in the previous session.

Oil explorers and producers including Senex, Karoon Gas and AWE all suffered falls of between 3 and 5 percent following a renewed slide in oil prices.

Sellers also set their sights on small iron ore miners such Mount Gibson Iron, BC Iron and Atlas Iron , driving their share prices sharply lower.

Atlas Iron fell as much as 13.3 percent to A$0.195 at one stage, placing it among the worst performers in the S&P/ASX 200 index.

Traders said there are worries that small and high cost miners will struggle to break even as iron ore prices fall further.

"Until we find some sort of stability in oil, it's going to be a fairly rocky period. We also saw iron ore prices fall again to below $70 a tonne," said Evan Lucas, market strategist at IG in Melbourne.

"But there are some positive signs for the longer term. Falling crude prices are actually a stimulus. It means capex is lower, consumer cost is lower, but it takes a while to filter through."

In contrast, New Zealand's benchmark NZX index inched up a touch to 5,613.34, holding gains after posting a lifetime closing high of 5,609.80 on Monday.

Resins maker Nuplex led gains, climbing 3.5 percent to a two-week high of NZ$2.98 as domestic exporters were seen benefiting from a slide in the New Zealand dollar.

Specialised milk processor A2 Milk rose 1.8 percent to NZ$0.57, supported by a slight rise in global dairy prices following a steep slide in 2014, while shares were also supported ahead of an expected dual listing on the ASX in the coming months.

Further gains were tempered by a 1.4 percent slide in construction materials maker Fletcher Building (NZSE: FBU.NZ - news) , which eased to NZ$8.27.

Shares (Dusseldorf: DI6.DU - news) in the country's largest listed company hovered near a one-year low of NZ$7.91 hit a month ago, underperforming the broader index on concerns that a sluggish building market in Australia, a key market, may weigh on earnings. (Editing by Shri Navaratnam)