Australian shares moved sideways on Tuesday as gains in the...

Australian shares moved sideways on Tuesday as gains in the energy and natural resources sectors were offset by weakness in financials and discretionary stocks in another busy week of earnings reporting.

The S&P/ASX 200 index (xjo) edged off 4.1 points or 0.1 percent to 5,536.2 by 02:54 GMT, but remained close to a peak of 5,611.2 touched earlier this month. It has gained 4.5 percent so far this year, largely due to falling interest rates at home and low returns on bank deposits.

"With bond yields continuing at record lows, the comparatively higher yields on offer in equities are likely to continue to see support for the index," said Angus Nicholson, a market analyst at IG.

He said the biggest domestic risk could be the possibility that further RBA rate cuts could see sentiment begin to turn on the banks.

Share in Australian banks, which account for around a third of the benchmark's weighting, have already dropped between 5 percent and 11 percent this year. IG's Nicholson said lower interest rates would further erode the banks' net interest margins and possibly affect their dividends.

Markets are pricing in a 50-50 chance of another easing this year by the Reserve Bank of Australia following its August cut to a record low 1.5 percent.

Among the largest financial institutions, National Australia Bank (NAB) led losses with a drop of 1 percent, followed by ANZ Bank (ANZ), off 0.5 percent. Commonwealth Bank of Australia (CBA) edged down 0.1 percent, while Westpac Banking Corp (WBC) gained 0.25 percent.

G8 Education (GEM) was the red lantern, down 16 percent after it reported a fall in profits.

But resources stocks rose, underpinned by firmer commodity and oil prices.

BHP Billiton (BHP) gained 0.5 percent, while spin-off South32 bounced 1.2 percent. BHP rival Rio Tinto (RIO) edged up 0.2 while iron ore producer Fortescue Metals Group (FMG) added 2.2 percent.

Whitehaven Coal (WHC), WorleyParsons (WOR) and Santos (STO) jumped between 2.5 percent and 3.8 percent.

New Zealand's benchmark S&P/NZX 50 index (nz50) fell 0.1 percent or 9.57 points to 7,378.78 as investors digested company earnings reports.

Heartland Bank (HBL) was up 0.7 percent after reporting a rise in its full year net profit. Summerset (SUM) also continued to ride a wave of solid earnings, up 1.4 percent.

In the other direction, Fletcher Building (FBU) was down 1.6 percent. The building company is due to report on Wednesday.