Reuters: Hot Stocks: Australia shares pare early gains to end at one-month low

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Australia shares pare early gains to end at one-month low Mar 19th 2013, 05:54 Tue Mar 19, 2013 1:54am EDT (Adds details, comments) SYDNEY, March 19 (Reuters) - Australian shares surrendered early gains to fall 0.6 percent and close at a one-month low on Tuesday as minutes of the central bank's latest meeting were seen reducing the chances of a rate cut and on worries about the bank bailout in Cyprus. Asian shares rebounded from worries over Cyprus, regaining ground, but the S&P/ASX 200 index ended the session 28 points lower at 4,987.4. The benchmark dropped 2.1 percent on Monday, its largest one day drop in 4 weeks. "The balance shown in international markets calmed our domestic equity market today, however initial gains have now been given up as the chance of a domestic interest rate cut this year diminishes," said Ben Taylor, sales trader at CMC Markets. Australia's central bank at its March policy meeting felt further cuts in interest rates might be required, but decided to wait and assess the impact of past easing. "The Australian market did get off on the right foot, but saw little interest to bid up stocks despite the strong (Asian) markets," said Chris Weston, chief market strategist at IG Markets. The government of Cyprus is hoping to push a divisive tax on bank deposits through parliament on Tuesday in a bid to stave off a default that could reignite the euro zone crisis. Iron ore miners BHP Billiton Ltd slipped 0.4 percent while Lynas Corp rallied 0.9 percent, after the company said a Malaysian court had dismissed a challenge by protesters against its long delayed rare earth processing plant . Rio Tinto Ltd lost 1.5 percent, after it said it expects iron ore prices to come under pressure in the second half of the year on slower growth in steel demand from top customer China and increased supply. Financial stocks finished the day mostly weaker, with Australia New Zealand Banking Group losing 0.9 percent. National Australia Bank bucked the trend, inching up 0.2 percent. "Most global markets lost ground yesterday, so we've taken on the lead there, the biggest driver for the market over the past 24 hours has been the concerns relating to the 10 billion euro assistance package relating to Cyprus," said Steven Daghlian, market analyst at Commonwealth Securities. "Nothing significant, not a huge pullback, but looking at the ASX200 index, it has fallen back below 5,000 points (that's) not always the best sign." The last time the market closed below 5,000 points was on Feb. 21. Gold miners helped support gains after gold prices hit their highest level since late February as some investors were drawn to the precious metal's safe haven properties amid the Cyprus news. Newcrest Mining and Evolution Mining jumped 1.5 percent and 5 percent, respectively. The downbeat mood also took its toll on the normally steadfast defensive sector, food retailer Woolworths Ltd dragged on the market, losing 2.6 percent after it traded ex-dividend, rival Wesfarmers dropped 2.4 percent. Gas provider AGL Energy fell 0.5 percent and top telecoms provider Telstra Ltd finished the day flat. New Zealand's benchmark NZX 50 index edged up 0.1 percent or 4 points to 4,345. (Reporting by Thuy Ong; Editing by Jacqueline Wong) Link this Share this Digg this Email Reprints

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