Australian shares inched up on Thursday as gains in defensive...

Australian shares inched up on Thursday as gains in defensive and industrial stocks outweighed a slump in consumer cyclicals after Morgan Stanley downgraded retailing giant Wesfarmers.

The S&P/ASX 200 index (xjo) was up 0.1 percent to 5,731.1 at 0337 GMT, thanks to healthcare and utility stocks after commodity-driven stocks and financials also declined.

The benchmark posted a 0.1 percent gain on Wednesday. Wesfarmers (WES) was the biggest drag on the benchmark on Thursday. It lost 3.8 percent, after Morgan Stanley downgraded its rating and target price, saying the market was underestimating Amazon.com's impact on Wesfarmers' A$20 billion ($14.79 billion) non-food retail sales.

In mid-May, the retail-to-mining conglomerate cancelled plans for an offering by its office supply unit, underscoring uncertainty in a retail sector hit by weak spending and facing the arrival of online shopping giant Amazon.com.

Even better-than-expected Australian retail sales numbers for April, released on Thursday, failed to cheer.

Rival Woolworths (WOW) was flat. Energy and basic materials stocks continued their downward ride amid worries about oversupply kept hit commodity and oil prices.

Iron ore futures in China fell to their lowest since November. Oil prices, however, climbed after a 3 percent dive overnight, though this did not support energy shares.

Miners Rio Tinto (RIO) and BHP (BHP) were off 1.5 percent and 2 percent respectively, and iron-ore miner Fortescue Metals Group (FMG) fell 4 percent.

Australia's oil and gas majors Woodside Petroleum (WPL) and Oil Search Ltd (OSH) both lost about 0.6 percent.

Healthcare and utilities stocks posted impressive gains. CSL Ltd (CSL), Australia's biggest healthcare stock by market value, was 1.7 up percent, tracking gains of peers in the United States. [.N]

Michael McCarthy, an analyst at CMC Markets, said "Investors are only buying stocks that have been under pressure recently," he said.

Industrials stocks Transurban Group (TCL) and Sydney Airport Holdings (SYD) added about 1 percent each.

New Zealand's benchmark S&P/NZX 50 index (nz50) was up 0.4 percent, or 29 points, at 7448.93.

Telcos and industrials boosted the benchmark, with Spark New Zealand (SPK) and Air New Zealand (AIR) up 2 percent and 3.8 percent respectively, the benchmark's biggest gainers.

These profits helped overshadow a slide in financials as Westpac (WBC) and ANZ's (ANZ) NZ-listed shares falling 1.8 percent and 0.4 percent respectively.

($1 = 1.3521 Australian dollars)