Australian shares reversed their previous strong gains to decline on Tuesday, as investors awaited key domestic inflation data and a meeting of European leaders to resolve the eurozone debt crisis.
The benchmark S&P/ASX200 index closed down 27.1 points, or 0.64 per cent, at 4,227.9 on Tuesday, while the broader All Ordinaries index lost 25.9 points, or 0.6 per cent, to 4,287.7.
By contrast, both indices were up around 2.6 per cent on Monday.
The December share price index futures contract on Tuesday was down 33 points at 4,216 with 34,053 contracts traded.
Comsec market analyst Tom Piotrowski said the market was becoming more realistic about outcomes in Europe, but things were moving in the right direction.
“On the face of it looks like a bit of a disappointment, given the US markets had a (strong night) and the picture in the US is looking more encouraging,” Mr Piotrowski said.
“The markets are really waiting on two key outcomes.”
Mr Piotrowski said there had initially been a lot of optimism about the European bailout package. He said early on, people expected a “shock and awe” solution, but that attitude had abated.
“The volatility of the markets continue, but we’re moving in the right direction.”
Resources defied the trend because they had been underperforming over recent weeks and were buoyed by news from China’s manufacturing sector, Mr Piotrowski said.
On Wednesday, the Australian Bureau of Statistics will publish the consumer prices index figures for the September quarter, the key measure of inflation.
A lower than expected reading could prompt the Reserve Bank of Australia to cut its cash rate.
National turnover was 1.84 billion shares worth $4.68 billion, with 15 shares rising for every four that fell.
Rio Tinto advanced $1.00, or 1.5 per cent, to $66.63, BHP Billiton closed up 32 cents, or 0.9 per cent, at $37.17.
The big four banks all lost ground, including the Commonwealth Bank which lost six cents to close at $48.72 after earlier gains.
ANZ dipped 16 cents to $21.55, National Australia Bank fell 27 cents to $24.67 and Westpac slipped 16 cents to $22.00.
Making news, brewer Foster’s says consumers remain hesitant because of global economic concerns but it expects beer sales to improve once economic uncertainty is resolved.
The brewer, which is being bought by global beverage maker SABMiller, slipped one cent to $5.30.
Pacific Brands dropped 3.5 cents, or 5.6 per cent, to 59.5 cents after shareholders rejected the remuneration package for the management of the clothing and linen producer.
Surfing brand Billabong International jumped 31 cents, or 8.6 per cent, to $3.91 after saying it was on-track for strong earnings growth this financial year.
Medical equipment maker ResMed said exchange rate movements led to an 11 per cent fall in its first quarter net profit.
ResMed shares slumped 39 cents, or 13 per cent, to $2.61, making the stock the worst performer among the ASX 200.
The best performer was Mirabela Nickel, which jumped 13 cents, or 9.5 per cent, to $1.50 after saying third quarter sales and production of nickel were records.
The price of gold in Sydney closed at $US1,655.65 per fine ounce, up $US1.80 from $US1,653.85 on Monday.
