Reuters: Hot Stocks: Australia shares ease, but pares losses as c.bank holds cash rate

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Australia shares ease, but pares losses as c.bank holds cash rate Feb 5th 2013, 05:42 Tweet Share this Email Print Tue Feb 5, 2013 12:42am EST (Adds details, comments) SYDNEY, Feb 5 (Reuters) - Australian shares eased 0.5 percent on Tuesday after discouraging U.S. factory orders hit Wall Street and political ructions in Spain and Italy spurred profit-taking but the Australian central bank's decision to keep interest rates on hold helped to trim losses. Australia's central bank kept its main cash rate steady at a record-matching low of 3.0 percent on Tuesday, but said a benign inflation outlook meant there was scope to ease policy further if needed. "The effect of this on the ASX 200 was a rally off the lows as some of the banks turned positive," said Stan Shamu, market strategist at IG Markets. Banks were mostly weaker. Westpac Banking Corp slipped 0.1 percent and the Commonwealth Bank of Australia fell 0.6 percent. National Australia Bank posted a loss of 0.9 percent. Australia New Zealand Banking Corp bucked the trend, rising 0.4 percent. "Lower rates make our high yielding banks look more attractive as a quasi-bond play. Although the local market is still down, it is outperforming the region." The S&P/ASX 200 index finished the day 24.8 points lower at 4,882.7. The benchmark index hit an intraday high of 4,951 but ended down 13.6 points at 4,907.5 on Monday. "Nervous investors who have made recent gains in equities are keen to hold onto these hard earned wins," said Ben Taylor, sales trader at CMC Markets. "It seems every man and his dog is now calling for a sell-off before domestically we continue to climb the wall of worry." Oil miners also finished the session weaker. Woodside Petroleum dropped 1.6 percent while Santos Ltd lost 0.9 percent. Global iron ore miners also finished the day weaker, with BHP Billiton Ltd slumping 1.7 percent and rival Rio Tinto Ltd tumbling 1 percent. A corruption scandal in Spain and polls showing Italy's former Prime Minister Silvio Berlusconi regaining ground before elections this month triggered fresh concern over potential threats to euro zone stability and growth. Wall Street stocks slid on Monday, giving the S&P 500 its worst day since November, as renewed worries about the euro zone crisis caused the market to pull back from recent gains. "If China continues to stabilise, the U.S. continues to improve, and the news out of Europe provides a glimpse of confidence, we will continue to see money flowing out of cash and bonds and into equities as investors get paid to take on risk," said Taylor. New Zealand's benchmark NZX 50 index finished 0.8 percent or 34.5 points lower, ending the day at 4,212. (Reporting by Thuy Ong; Editing by Jacqueline Wong) Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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