* Financial sector in the red
* China devalues yuan
* Resources sector props up the index (Adds analysis, quotes, stocks on the move)
By Pauline Askin and Gyles Beckford
SYDNEY/WELLINGTON, Aug 11 (Reuters) - Australian shares gave up early gains to fall 0.5 percent on Tuesday as investors booked profits in most sectors after China devalued its currency following weaker-than-expected economic data.
The S&P/ASX 200 index .AXJO fell 28.36 points to 5,480.8 by 0349 GMT. The benchmark, trading near one-month lows, gained 0.6 percent on Monday.
"It was the weakness in the Chinese economic data coming in well below expectations ... and the Chinese have just devalued their exchange rate," Damien Boey, equity strategist, Credit Suisse (SIX:CSGN) said.
China's central bank sharply weakened the yuan on Tuesday, saying it had changed the way it calculated the currency's daily midpoint against the dollar. ID:nZZN2WIS00 China is Australia's No.1 trading partner.
Australian business confidence eased back in July as mining and construction firms turned more cautious.
Banks weighed heavily on the index with National Australia Bank NAB.AX falling 2.3 percent and Westpac Bank WBC.AX down 1.9 percent.
Bendigo and Adelaide Bank BEN.AX fell as much as 4.5 pct to their lowest since June 16.
But it wasn't all doom and gloom, resources remained in the black with global mining giants Rio Tinto (LONDON:RIO) RIO.AX and BHP Billiton (LONDON:BLT) BHP.AX up 1.5 percent each.
Gold miner Evolution Mining Ltd EVN.AX rose as much as 8.9 percent after an agreement was signed with Edna Berly Mining ERM.AX . offer at its current level. (Editing by Kim Coghill)