Australian shares slipped 0.2 percent on Wednesday, unable to sustain brief gains as critical weekend elections in Greece loom, although coal producer Whitehaven rose 4.5 percent after a buyout approach. Top banks ended lower, with ANZ Banking Group falling 0.9 percent. Traders said longs were closing out to run a flat book in case of an anti-austerity party victory in Greece, while short-sellers were equally nervous in case the outcome favours risk assets.
The debt crisis in Europe has cut forecasts for world growth and demand for Australian commodity exports. Some investors are also worried Australian house prices face a sharper re-rating downwards after values have sunk in the US, UK, Ireland and other parts of Europe.
"Our market is being sold down due to its large weighting in commodities and banks. Fear of a European implosion and Australian house-price collapse ... has fund managers taking underweight positions on Australia," said Ben Taylor, stategist at CMC Markets. The benchmark S&P/ASX 200 index fell 9 points to 4,063.8, according to the latest data, erasing Tuesday's gain of 0.2 percent.
New Zealand's benchmark NZX 50 index dropped 1.3 percent to 3,381.7 points. Technicals revealed a risk of further downside even after a fall of as much as 10 percent in May, said Stan Shamu, strategist at IG Markets.Locally, Whitehaven Coal, Australia's second-biggest independent coal producer, rose to A$4.18 after it said it had received a buyout approach from its top shareholder, billionaire Nathan Tinkler.
Taxi firm Cabcharge fell 6.4 percent to A$5.25, its lowest since February, after Australia's central bank said issuers of credit cards could limit surcharges from 2013. Cabcharge said in a statement to the exchange it believes the changes do not impact its service fee of 10 percent. Analysts said the repercussions were uncertain but the move highlighted regulatory risk for Cabcharge. Job ad website SEEK Ltd fell 2.4 percent to A$6.50 after it said it would not proceed with an issue of subordinated notes announced to the market on June 4.
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