Australian shares waver, propped by BHP; NZ down

* BHP rise on hopes for higher shareholder returns

* Benchmark index set for fourth straight month of gains

* Weak lead from Wall Street caps gains

By Nikhil Nainan

July 31 (Reuters) - Australian shares wavered in early trade on Tuesday but edged higher as investors in BHP helped the market cling to positive territory, holding near its 2018 highs despite another negative lead from Wall Street.

The S&P/ASX 200 index rose 5.3 points, less than 0.1 percent, to 6283.8 by 0202 GMT.

The benchmark fell 0.4 percent on Monday, but was still set to show a rise for a fourth consecutive month, though technical analysis suggested some correction could be due.

"But it does suggest that there are valuation impacts holding back the overall market and that in a technical sense this is the top of the range for the moment," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader

BHP jumped to its highest in nearly four years and was the biggest boost to the overall index, rising as much as 1.7 percent.

"BHP's getting the credit from selling its shale assets. People are hanging on because they think potentially there will be capital management like a buy-back, or even higher dividends," said Mathan Somasundaram, a Blue Ocean Equities market portfolio strategist. Despite the inevitable prospect of a strike at the global miner's Escondida mine in Chile (Stuttgart: 704599.SG - news) , investors are still locking in positions after the company promised to return proceeds to shareholders from it's U.S. shale assets sale to BP Plc.

Workers at Escondida, the world's largest copper mine, are expected to officially reject BHP's final contract offer by Wednesday following meetings last week.

Telstra, which has faced significant headwinds this year, is among the top gainers on the index, rising over a percent and on track for a third straight session of gains.

On Monday, the under pressure telecom firm announced a management shake-up, naming a new chief financial officer and senior management at its infrastructure division, another move in a strategic reset.

Financials and energy stocks also contributed to the index's gains, with Westpac Banking and Woodside Petroleum (Frankfurt: WOP.F - news) among the top.

Wall Street fell overnight as U.S. stocks took another battering from the rout in technology stocks which has extended on the back of disappointing results from the big players.

Down the index, gold explorer Regis Resources (Dusseldorf: RKQ.DU - news) was the biggest percentage loser, down as much as 13 percent as the firm reported soft guidance.

New Zealand's benchmark S&P/NZX 50 index inched 0.1 percent lower or 12.03 points to 8,909.35.

Index heavyweights a2 Milk Company and Fletcher Building topped the losses, down 1.3 percent and 0.8 percent, respectively.

Fonterra said on Tuesday that its total milk production in the region rose 11 percent in June, highlighting falling global diary prices which have been undercut by increased production.

For more individual stocks activity click on (Reporting by Nikhil Kurian Nainan, additional reporting by Ambar Warrick in Bengaluru; Editing by Simon Cameron-Moore)