SYDNEY, May 9 (Reuters) - Australian shares ended almost flat Thursday, slightly backing off from a nearly 5-year high hit earlier in the session, as a fall in Chinese producer prices prompted investor concern about subdued demand in Australia's biggest export market. China posted slightly higher consumer price inflation for April, which was still below the central bank's 3 percent forecast, while its producer prices dropped 2.6 percent, falling for a 14th consecutive month. Analysts said it was the factory prices that investors were more concerned about, which pointed to subdued factory activity and demand for resources. "China's PPI (producer prices inflation) figure is a bigger concern," said Biyi Cheng, head of Asia Pacific dealing at City Index in Sydney. "It turned out to be surprisingly low, which means China has been trapped in low inflation." "If Chinese data points to subdued demand, that will inevitably drag the Australian equities market. Even the strong job data could not support," Cheng added. The S&P/ASX 200 index dropped 1.4 points to 5,198.4, according to the latest data. The benchmark jumped 1.1 percent on Wednesday, buoyed by better-than-expected trade data from China which boosted prices of base metals. On the local front, Australian employment surged by 50,100 in April, a resoundingly upbeat report which contrasted with the Reserve Bank of Australia's (RBA) decision to cut interest rates to a record low of 2.75 percent this week. The strong jobs data, which should be good for the economy, failed to lift the market as investors had been pricing for further rate cuts, said Stan Shamu, a market strategist at IG in Melbourne. "I think it puts the RBA on hold for a bit longer," Shamu said. "If the economy is generating jobs, there's not an immediate need to ease again." GOLD MINERS RALLY Global miner BHP Billiton Ltd added 0.7 percent, while rival Rio Tinto Ltd lost 1.2 percent, after chairman Jan Du Plessis said the company had recently reassessed its dividend policy and decided to stay with the one it had for a number of years. Gold miners gained as gold prices held steady after rising more than 1 percent in the previous session. Australia's biggest listed gold producer Newcrest Mining Ltd climbed 2.4 percent. Smaller gold miner St Barbara Ltd surged 25.4 percent, posting the biggest one-day percentage gain in almost 10 years. "The stock has been oversold," said Patersons Securities dealer Martin Angel. "Now there's a bit of confidence perhaps coming back into the sector, which has been decimated by stupidity." Financials mostly gave up some recent gains, which were driven by robust earnings and dividends. National Australia Bank Ltd lost 2.1 percent, after it posted a 3.1 percent rise in first-half cash profit, lagging behind its peers. Australia and New Zealand Banking Group, the smallest in the "big four", declined 2.8 percent, as its shares went ex-dividend on Wednesday. Biopharmaceutical products maker CSL Ltd gained 1.9 percent after the sell-off in the previous session. Lynas Corp Ltd jumped 8.4, as the rare earths miner, which has a controversial plant in Malaysia, extended gains after the ruling coalition in Malaysia was elected. New Zealand's benchmark NZX 50 index ended nearly flat at 4,639.3, shedding 0.9 point, just slightly shy of an all-time high hit in the previous session.

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