Australian shares gave up earlier gains to end lower as renewed investor concerns about the European debt crisis took the steam out of a retailer-driven rally.
CMC Markets sales trader Ben Taylor said growing concern that Portugal may soon follow Greece in being unable to finance its sovereign debt scared off investors in the run up to the Australian earnings season.
“I have the feeling that the blowout in Portuguese (bond) yields and falls in commodities will see a drop off in the funds flooding back into the markets,” he said.
At the close on Tuesday, the benchmark S&P/ASX200 index was down 10 points, or 0.23 per cent, at 4,262.7, while the broader All Ordinaries index was down 8.7 points, also 0.2 per cent, at 4,325.7.
The March share price index futures contract was down 19 points at 4,226.
The Australian equities market added around $65 billion in value this month, one of the best performing January since 1970.
On Tuesday, 1.91 billion shares were traded with a value of $4.34 billion.
There were 468 stocks up, 465 down and 410 unchanged.
Retailers were the day’s top performers, with consumer staples adding 0.7 per cent and consumer discretionary adding 0.2 per cent.
JB Hi-Fi led the push higher, adding 78 cents, or 6.6 per cent, to $12.60 while David Jones gained 14 cents, or 5.71 per cent, to $2.59.
Woolworths added 34 cents, or 1.29 per cent, to $24.74 after it reported first half sales rose five per cent to $29.7 billion despite the supermarket giant facing subdued consumer confidence and falling prices.
“There’s already been a lot of bad news priced in to the (retail) sector after the race to downgrade ahead of Christmas,” Burrell Stockbroking director Richard Herring said.
“This could be a reasonable opportunity to buy in.”
Wesfarmers, while still up, was the worst performer in the sector after the owner of Coles announced it would cut its fruit and vegetables prices by up to 50 per cent. Its shares rose 13 cents to $30.30.
BHP Billiton was down 19 cents at $37.48 and fellow miner Rio Tinto was up 16 cents at $69.16.
Telstra shares added two cents to $3.33 after the telco said it would shed 99 administrative roles from its operations division.
Shares in Lynas Corporation ended up 1.5 cents at $1.325 after the rare earths miner said its Mount Weld plant in Western Australia is recovering ore ahead of targets.
Financial stocks shed 0.3 per cent after ratings agency Fitch put Australia’s big four banks on a credit downgrade watch Monday because of their strong reliance on overseas funding.
Westpac was the only bank to finish higher, adding five cents to $21.15, while the other big four all shed between 0.3 and 0.7 per cent.
The price of gold in Sydney closed at $US1,736.20 per fine ounce, up $US5.94 from $US1730.26 on Monday.
