(Adds details, comments)
SYDNEY, March 21 Australian shares reversed
early gains to finish down 0.2 percent on Thursday, as upbeat
Chinese manufacturing data for March was offset by political
uncertainty as Prime Minister Julia Gillard faced a leadership
Rivals called on Gillard for a ballot to resolve months of
slipping polls and internal tensions that put her minority Labor
government on course to be swept away at September elections.
"This move has, and will continue to increase the political
risk in Australia," said Chris Weston, chief market strategist
at IG Markets.
"This will cause jitters in the local market which can be
seen by an initial fall in the ASX200."
The S&P/ASX 200 index 8 points lower at 4,959.4, a
fourth consecutive session of losses. The dip reversed intraday
gains that saw the index reach 4,998.9 points. The benchmark
fell 0.4 percent on Wednesday.
"The untenable position the government currently holds can
only serve to remind overseas investors of the political
uncertainty and risk inherit in our market," said Ben Taylor,
sales trader at CMC Markets.
The Australian market has risen around 7 percent this year,
buoyed by a relatively strong earnings season, upbeat domestic
data and signs of improvement in the global economy.
Billabong tumbled 14.2 percent to an all-time low
of A$0.70 on Thursday amid concerns about the status of two
rival $544 million bids for the company.
Gold miners weighed on the market after the bullion slipped
on Wednesday in response to the U.S. Federal Reserve's pledge to
maintain its accommodative policy stance to support the economy.
Newcrest Mining and Resolute Mining Ltd
lost 2.4 percent and 2.2 percent respectively.
Data earlier in the day that showed a pick up in
manufacturing activity in China, Australia's biggest export
market, helped contain broad market losses.
The data drove up some of the big mining and steel stocks.
Rio Tinto Ltd advanced 1.4 percent, while Fortescue
Metals Group soared 2.9 percent. Bluescope Steel jumped
BHP Billiton Ltd bucked the trend, losing 0.4
Elsewhere, food retailer Woolworths Ltd lost 0.7
percent, rival Wesfarmers declined 2 percent and top
telecommunications provider Telstra traded flat.
Financials were mixed, with Australia New Zealand Banking
Group and Westpac Banking Corp up 1.1 percent
and 0.5 percent, respectively, while top lender Commonwealth
Bank of Australia fell 0.7 percent.
New Zealand's benchmark NZX 50 index slipped 0.2
percent or 6.9 points to 4,342.5.
(Reporting by Thuy Ong; Editing by Shri Navaratnam)