Australian stocks slipped 0.2 percent in subdued trade as investors waited a verdict on Europe's bailout mechanism and this week's US Federal Reserve meeting. Germany's Constitutional Court will rule on Wednesday whether the European Stability Mechanism (ESM) can be go ahead. Analysts say the court holds the fate of the euro in its hands.
"There is huge uncertainty about the German constitution court decision," said Andrew Pease, investment strategist at Russell Investment Group. The benchmark S&P/ASX 200 index closed 8.0 points down to 4,325.8. New Zealand's benchmark NZX 50 index rose 0.5 percent to 3745.0 points.
After three days of gains for the local market, investors were also pausing to wait for the policy meeting of the US Federal Reserve, which will likely announce another round of stimulus. Global miner BHP Billiton Ltd inched up 0.4 percent to A$32.60, while rival Rio Tinto Ltd lost 0.3 percent to A$54.53.
Bluescope Steel Ltd jumped more than 4 percent following the biggest one-day gain on spot iron prices on Monday and the sharp rise for China steel futures on Tuesday, supported by China's massive infrastructure stimulus. Bank shares continued to fall, except for smallest lender National Australia Bank Ltd, which recovered to end 0.3 percent higher. Top lender Commonwealth Bank of Australia led Tuesday's losses by dropping 0.6 percent. Qantas Airways Ltd declined 2.3 percent as it was waiting for the Australian Competition and Consumer Commission to approve its 10-year alliance with Dubai's Emirates Airline.
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