Australia shares slip 1.3 pct on recovery doubts

(Adds comments, details)

By Denny Thomas

SYDNEY, Nov 20 (Reuters) - Australian shares fell 1.3 percent on Friday to a two-week closing low, as companies with large export earnings, such as Westfield Group <WDC.AX>, lost ground on concerns the U.S. economic recovery was losing momentum.

Commodity stocks also fell after leading a recent rebound on doubts whether the market had run ahead of fundamentals.

"Share markets ... ended pretty weak in response to some profit downgrades and lingering worries that they have risen too far to fast," said Shane Oliver, head of investment strategy with AMP Capital Investors.

"It would seem that the correction that got underway in mid-October is still not over," he added.

The benchmark S&P/ASX 200 index fell 63.4 points to 4,685.8, based on the latest available data, its lowest close since Nov. 9. The index is still up about 50 percent from a five-year closing low reached in early March.

New Zealand's benchmark NZX 50 index <.NZ50> fell 0.9 percent to 3,113.6.

But investors said medium-to-long-term outlook was still positive.

"Despite the unclear short term picture our assessment remains that the trend in shares is likely to remain up as the global recovery feeds into higher profits and as interest rates remain low encouraging investors to further switch from cash into shares," Oliver added.

Westfield, the world's biggest shopping mall owner by market value, lost 2.7 percent to A$12.35, while building products maker James Hardie Industries <JHX.AX> lost 1.9 percent to A$7.70.

Westfield has about half of its retail outlets in the United States, while James Hardie earns over two-thirds of its profit offshore.

Commodity stocks were pulled down on worries that a sluggish economic recovery would crimp demand for metals.

BHP Billiton Ltd <BHP.AX>, the world's biggest miner, lost 2 percent to A$40.03 and smaller rival Rio Tinto Ltd <RIO.AX> shed 1.9 percent to A$71.22.

Rio raised $459 million in an IPO of its Cloud Peak unit, but it sold shares below the marketing range. [ID:nN19192702]

Insurance Australia Group Ltd <IAG.AX> lost 6.9 percent, or A$0.29 cents, to A$3.92 partly on going ex-dividend.

The stock was also hit as speculation dimmed that former suitor QBE Insuance Group Ltd <QBE.AX> would launch a bid. IAG had jumped more than 5 percent on Thursday. A QBE executive poured cold water on the rumours in an interview with CNBC television.

QBE edged up 0.4 percent to A$22.64.

Australia and New Zealand Banking Group Ltd <ANZ.AX> fell 2.3 percent to A$21.75. The bank was eyeing the Australian and New Zealand assets of insurance group AXA Asia Pacific Holdings Ltd <AXA.AX>, according to a report in Melbourne's Herald-Sun newspaper.

AXA Asia Pacific fell 2.2 percent after French insurer AXA said on Thursday that there was no change for now to its offer made with partner AMP Ltd <AMP.AX>, despite speculation the bid may be raised. [ID:nSYD475879].

AMP slipped 2 percent to A$6.33. (Editing by Jonathan Standing)