Australian stocks ended a choppy session 0.5 percent down, at a two-week low, with concerns over European and US economic challenges continuing to undermine sentiment. Stocks staged a rebound at midday when S&P 500 futures traded in Asia did a U-turn to go higher but then Australian shares lost momentum as European futures looked set to start lower and Asian indices started falling.
"One of best hopes for a positive resolution to current sovereign debt problems is for economies to grow sufficiently to allow debt levels to stabilise," Ric Spooner, chief market analyst at CMC Markets said. "When investors get a sense that markets are leaving the headlines, they can start to contemplate the possibility of recession being avoided and share valuations looking attractive at these levels."
The benchmark S&P/ASX 200 index fell 19.65 points to 4,082.30, according to latest available data. The index rose as much as 1.43 percent during the day. Gas explorer Bow Energy jumped 60 percent to A$1.415, just short of the A$1.48 a share offer made by Arrow Energy for the firm. .
Packaging firm Amcor rose 2.6 percent after reporting a 39 percent rise in full-year underlying profit, beating market forecasts, spurred by savings captured after its take-over of Alcan. BlueScope Steel, which is struggling with a high Australian dollar and soaring iron ore and coal costs, fell 5.7 percent, to an all time low, after it announced a big net loss on Monday, the closure of one of its blast furnaces and the loss of 1,000 jobs.
Take-over target Macarthur Coal jumped 2.7 percent after media reports that Anglo American is considering bidding against Peabody Energy and ArcelorMittal's $5 billion offer. Dominant telephone firm Telstra fell 3.3percent as it went ex dividend. Goodman Fielder fell 9.1 percent to A$0.7, a record low, continuing sharp losses on Friday after it took a A$300 million impairment charge and cut its profit expectations. Fund manager Challenger rose 4 percent after posting a 7 percent rise in annual net profit and giving a positive outlook. Newcrest Mining rose 1.7 percent after gold climbed to new highs in a flight to safe haven assets. New Zealand's benchmark NZX 50 index nudged up 6.6 points to 3,274.4 points.