SYDNEY (Dow Jones)--The Australian share market took a bearish lead Tuesday from materials sector falls on Wall Street, after the U.S. dollar recovered slightly, undermining the prices of commodities such as gold, oil and copper. The benchmark S&P/ASX 200 index closed down 32.7 points, or 0.7%, at 4951.6 after hitting 4944.5. The index is 59% above the bear market low of March 2009 and 28% below the bull market high of November 2007. It hit a 19-month high of 4986.1 on Monday. Southern Cross Equities director Charlie Aitken said the Australian share market may have hit a significant peak at 4986.1, a 50% retracement of the preceding bear market decline. "I think the market is toppish and I think it's time to be sensible," said Aitken. On Wall Street, the S&P 500 rose 0.3%, but the U.S. materials sector fell 0.5%. Domestically, BHP Billiton fell 1.4% to A$43.84 and Rio Tinto fell 1.4% to A$79.50, while Newcrest Mining fell 1.5% to A$34.41 and Lihir Gold fell 1.5% to A$3.92. In the energy sector, Woodside fell 1.6% to A$47.00 and Santos fell 1.9% to A$14.64. Alumina fell 5.6% to A$1.775 after first quarter results from its Alcoa World Alumina and Chemicals joint venture partner, Alcoa, met expectations in terms of earnings per share, after special items, although revenue was weaker than expected. "The recent rally has left global markets largely priced for perfection, meaning that we could see selling pressure should U.S. earnings merely meet forecasts, as was the case with Alcoa," said IG Markets strategist Ben Potter. "We'll need some decent offshore catalysts, probably in the form of better-than-expected earnings, if the ASX is to test 5000 this week." Partly offsetting the fall in a majority of sectors was a rise in defensive stocks, with Telstra surging 2.9% to A$3.19 and AGL Energy up 1.2% to A$15.38. Southern Cross Equities' Aitken said Telstra rose on hopes of a deal with NBN Co. as well as defensive rotation out of the materials sector. "Any deal between Telstra and NBN Co., I believe, would be positive for Telstra's share price because it would lower uncertainty," said Aitken. "The share price is potentially trying to tell you that some deal has been done." Banks outperformed before upcoming interim earnings reports with ANZ rising 0.2% to A$25.42. "I wouldn't be surprised if banks do better before their reports," said one senior trader at major broker, noting that April was historically the strongest month for banks. Elsewhere in the financials sector, Macquarie Group rose 1.1% to A$50.00 and QBE Insurance rose 1.2% to A$22.05. Traders are generally expecting consolidation before U.S. corporate and economic reports this week, as well as a host of Chinese economic data due Thursday. But most traders are bullish, despite the proximity to major technical resistance at 4986.1 and psychological resistance at 5000.0. "We are probably due for a breather, but the economic commentary and data is continuing to strengthen in support of the recovery," said RBS head of sales Justin Gallagher. "If the U.S. reporting season is reasonable and the economic data are supportive, I think we could give 5000 a crack this week." -By David Rogers, Dow Jones Newswires: 61-2-8272-4693: david.rogers1@dowjones.com

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