(Updates to close) Jan 11 (Reuters) - Australian shares...

(Updates to close)

Jan 11 (Reuters) - Australian shares extended losses to a second session on Thursday, led by declines in financials, after a report that China may dial down purchases of U.S. government debt rattled Wall Street.

The S&P/ASX 200 index (xjo) fell 0.5 percent, or 29.1 points, to 6,067.60. The benchmark lost 0.6 percent in the previous session.

The three major indexes on Wall Street snapped a six-session rally on Wednesday as investors grew jittery after Bloomberg reported that China, the world's biggest foreign holder of U.S. Treasuries, could slow or halt U.S. government bond purchases. [.N]

Australia and New Zealand Banking Group (ANZ) finished 0.2 percent weaker at its lowest close in a week, while Westpac Banking Corp (WBC) and Commonwealth Bank of Australia (CBA) fell 0.5 percent and 0.4 percent, respectively.

Materials stocks reversed early gains in the session to end lower, with heavyweight BHP Billiton Ltd (BHP) slipping 0.4 percent.

Australia's Port Hedland iron ore terminal, used by the nation's top miners, has begun clearing all vessels in its harbour as a tropical storm intensifies off the western Australian coast.

Meanwhile, New Zealand's benchmark S&P/NZX 50 index (nz50) registered broad losses and dropped 1.4 percent to finish at 8,250.44, its lowest close since Dec. 8.

Dairy firm A2 Milk Company (ATM) shed 4.4 percent to touch a near two-month closing low, while Auckland International Airport (AIA) dropped 2.3 percent, hitting its lowest close in six weeks.