Westpac Banking Corp shares fell as much as 4.5 percent as investors were concerned over the rise in impairment charges after the bank reported third-quarter results.

The shares were trading 4.5 percent lower at A$20.21 at 0105 GMT.

"You could argue it might have been slightly weaker than the other banks, but probably not as bad as today's reaction," said Jason Beddow, managing director of Argo Investments, which has Westpac as its top bank holding in its portfolio.

"It's very volatile...Intraday (moves) at the moment are all a bit meaningless."

Shares in Qantas Airways jumped more than 4 percent after the carrier unveiled plans to set up two new Asia-focused airlines, plans for a $9 billion fleet upgrade and up to 1,000 job cuts.

The shares rose 4.3 percent to A$1.595.

"They really needed to do something. Globally the airline industry is also struggling and they have gone a long way here to address the issues they're facing," said CMC Markets chief strategist Michael McCarthy.

The benchmark S&P/ASX 200 index rose initially before slipping 18.5 points to 4,264.4 at 0108 GMT, failing to hold above a key resistance level of 4,289. The benchmark jumped 2.6 percent on Monday as investors snapped up bargains as panic offshore abated.

"It is healthy that we are taking a bit of a pause here. We have come a long way from (last week's low of) 3,760 and we should expect a break," said McCarthy. The market has bounced 12 percent from last week's intraday low.

New Zealand's benchmark NZX 50 index climbed 0.6 percent to 3,274.1.

STOCKS ON THE MOVE

Building material maker James Hardie reported a sharp drop in first-quarter profit to $1 million but said it was comfortable with analysts' forecasts for the year to March 2012.

That helped to send its shares up 4.1 percent to A$5.57.

Shares in gaming group Tabcorp gained 1.6 percent after the firm beat analysts' forecasts with a 14 percent rise in full-year net profit.

Copyright Reuters, 2010