Australian shares ended flat after retreating from positive territory on growing concerns that Greece and Portugal may need more bailout funds.
“Risk assets continue to trade cautiously on the slight chance that the result out of Greece comes in contrary to expectations,” IG Market strategist Stan Shamu said.
“Such an event could result in a swift retreat in risk assets after the recent strong run.”
He said ongoing negotiations between Greece and its creditors kept investors nervous despite a positive session in Europe overnight that buoyed local sentiment.
A growing consensus that Portugal may not be able to access funding from international markets to meet its debts next year also reignited concerns over Europe’s debt crisis, he said.
At the close on Tuesday, the benchmark S&P/ASX200 index was down 0.9 points at 4,224.2 while the broader All Ordinaries index was down 1.2 points at 4,286.4.
On the ASX 24, the March 2012 share price index futures contract was down four points at 4,189, with 21,794 contracts traded.
Volumes were light across Asia amid the Lunar New Year holiday in the region.
Turnover was 1.63 billion shares worth $3.27 billion – below the average turnover of around $3.8 billion.
Resources closed down 0.3 per cent, health care shed 1.2 per cent and technology stocks ended down 0.8 per cent, marking the second consecutive day of losses this week.
Retailers shed 0.5 per cent as investors mulled gloomy forecasts for the imminent earnings season.
“The toplines shouldn’t surprise too much but we could start to see some of the costs tick up,” UBS retail analyst Ben Gilbert said.
Surfwear retailer Billabong was the largest loser in the consumer discretionary sector, shedding 6.1 per cent, or 12 cents, to $1.865 after gaining sharply on Monday on the back of rumours it could be a target for a private equity buyout.
Materials closed lower, led by a 16 cent loss to $37.08 from the bourse’s largest stock, BHP Billiton.
Australia’s largest gold miner Newcrest Mining rose 64 cents to $32.84 after its production results met market expectations.
Energy stocks rose 0.5 per cent after news that the European Union embargo on Iranian exports sent oil prices surging to nearly $US100 a barrel.
Shares in AWE ended the day up three cents at $1.485 at after the energy explorer said it may sell about 50 per cent of an oil project in Indonesia to help fund a $US600 million expansion across Australia, New Zealand and other parts of Asia.
Papua New Guinea-focused oil and gas producer Oil Search rose 18 cents to $6.84 after it reported a 26 per cent rise in revenue for the year to December 31 to $US732.9 million, thanks to higher oil prices.
Spotless was another top performer adding seven cents to $2.38 after the union representing 4,000 of its members blasted the cleaning company’s board for not accepting a $711 million offer from suitor Pacific Equity Partners.
