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SYDNEY, Feb 26 Australian shares fell 1 percent
on Tuesday on renewed fears of euro zone instability as Italy
faces a political deadlock and after Wall Street suffered its
biggest fall since November.
The financials dragged on the index, with Australia New
Zealand Banking Group posting the biggest loss of 1.1
International iron ore miners BHP Billiton Ltd and
Rio Tinto Ltd plumbed 1.5 percent and 0.9 percent
The S&P/ASX 200 index finished the day 52.2 points
lower at 5,003.6, trimming losses from the morning.
At one point, the index was down 1.5 percent, but the
pullback spawned "swift bidding support", Ben Taylor, sales
trader at CMC Markets, said
"Low interest rates continue to see the cash pour in," he
After U.S. stocks fell sharply on Monday, investors will be
closely watching Federal Reserve Chairman Ben Bernanke's
testimony to Congress on Tuesday and Wednesday to seek further
clues on American monetary policy.
Italy faced political deadlock on Tuesday after a huge
protest vote enraged by economic hardship and political
corruption left no group with a clear majority in parliament.
"The Italian voter has spoken out and this has thrown up
political instability as perhaps the number one issue facing
Europe in 2013," said Chris Weston, chief market strategist at
IG Markets in Melbourne.
"Conservative traders will probably hold off and see how
traders act tonight in Europe and the U.S.," he said.
On Tuesday, Australian food retailers finished the day
weaker with Coles-owner Wesfarmers dropping 1.2 percent
while rival Woolworths Ltd plummeted 2.2 percent.
Gold miners underpinned the market, Newcrest Mining
climbed 1.9 percent while rival gold producer Medusa Mining
soared 3.5 percent. The bullion rose about 1 percent on
Monday, extending to a third day of rallies, as a sharp pullback
in U.S. equities and uncertainty over the outcome of Italy's
election led to resurgent safe-haven buying.
QBE Insurance, Australia's biggest insurer, fell
2.2 percent after posting a lower-than-expected 8 percent rise
in net profit to $761 million due to high claims for accidents
an adverse U.S. weather.
Whitehaven Coal lost 3 percent after reporting a
first-half loss on Tuesday, whacked by weak coal prices and a
strong Australian dollar.
New Zealand's benchmark NZX 50 index closed the
session 0.3 percent or 12.5 points higher to 4,238.9.
(Reporting by Thuy Ong; Editing by Richard Borsuk)