* Banks slide
* Energy stocks track oil prices up, then down
* Weak U.S. futures weigh on market (Adds analysis, quotes, stocks on the move)
MELBOURNE/WELLINGTON, Sept 1 (Reuters) - Australian shares fell 1.4 percent on Tuesday after official and private data showing China’s manufacturing activity contracted in August, reinforcing worries about the health of Australia’s biggest export market.
China’s official manufacturing Purchasing Managers’ Index (PMI) fell to 49.7, in line with forecasts, from 50 in July, cooling at its fastest pace in three years.
A private survey showed the factory sector shrank at its fastest pace in almost 6-1/years in August, although that was a bit stronger than a preliminary reading.
“It wasn’t a positive for the market, despite the fact that the private read came in slightly better than expectations. I would have expected to see some support,” said Michael McCarthy, chief market strategist at CMC Markets.
The S&P/ASX 200 index fell 72.9 points to 5,134.1 as of 0213 GMT. The benchmark fell 1 percent on Monday.
Sentiment on Tuesday was dented by weak U.S. futures trading, down about 1.9 percent .
“Ongoing weakness we’re seeing in futures is a big concern,” McCarthy said.
The financial services sector, off 1.5 percent, led the market lower ahead of the Reserve Bank of Australia’s rate decision. Economists widely expected the RBA to hold rates steady, but were watching for any shift in its easing bias.
Retailers were under pressure after Australia’s biggest department store chain, Myer Ltd, posted a 21 percent slide in annual profit and said it would raise A$221 million ($157 million) from shareholders.
Supermarket giant Woolworths Ltd fell 2.8 percent, while The Reject Shop fell 1.4 percent.
Energy stocks jumped in early trade following strong oil price gains overnight, but eased as oil prices came off again on profit-taking.
New Zealand’s benchmark NZX50 share index fell 38.890 points or 0.69 percent to 5,617.210 on broad based losses, tracking falls in many global sharemarkets.
A2 Milk fell as much as 8.6 percent in early trade after a media report that a potential takeover by Dean Foods Co and Australia’s Freedom Foods Group had fallen through. A2 later confirmed it believed no takeover was imminent.
Air New Zealand dropped 3.44 percent as investors grew concerned about price wars sparked by rival budget airline Jetstar adding regional routes.
Spark NZ fell 2.66 percent, as investors took profits after a 10 percent gain last week.
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$1 = 1.4077 Australian dollars Reporting by Sonali Paul and Charlotte Greenfield; Editing by Eric Meijer