MELBOURNE: Australian stocks recouped half their early losses to end down 0.2 percent on Wednesday, with hefty demand for top stock BHP Billiton ahead of a share buyback shielding the market from a bigger fall.
BHP shares ended down 1 cent at A$46.57 after mostly trading higher in their biggest volume in nearly four years as investors snapped up shares ahead of a deadline on Thursday to be eligible for one component of the buyback.
Following two days of sharp falls in the wake of growing unrest in Libya, the market held up relatively well.
"Having had three days to adjust to the risk posed by the uprising in Libya, we may have reached the stage where the market will only move lower on more concrete evidence of disruption to oil supplies or political contagion," said Anthony Whitaker, institutional equities dealer at CMC Markets.
The benchmark S&P/ASX 200 closed down 10.8 points at 4,845.9, nearly a three-week low.
New Zealand's benchmark NZX 50 index rose 0.4 percent to close at 3,372.1, with heavyweight Fletcher Building up 0.8 percent on the prospects of construction demand following the devastating earthquake in Christchurch.
BHP's $5 billion buyback of its Australian shares was announced on Wednesday, following the company's promise last week to return up to $10 billion to shareholders by the end of 2011.
The buyback is attractive to pension funds and other investors in low tax brackets and also creates a way for investors to book capital losses that can be carried forward to offset future capital gains.
Investors piling into BHP, the world's third-largest listed company by market value, to offer them back to the company in the off-market buyback are likely to be disappointed by the uptake from what is a $240 billion company, dealers said.
"In the whole scheme of things you've got to take into account there'll be significant scalebacks, given the buyback is still only a small portion of their total share market capital," said Jamie Spiteri, senior dealer at Shaw Stockbroking.
Defensive stocks were among the top blue-chip gainers, with top phone company Telstra Corp up 0.7 percent and blood products maker CSL up 0.6 percent.
Company earnings results dominated other moves on the market on Wednesday.
Coca-Cola Amatil, Australia's top soft drinks bottler, jumped 2.8 percent to A$11.69 after saying it had made a solid start to 2011, with volume and revenue growth in nearly all states ahead of last year.
Port and rail operator Asciano , one of the day's most active stocks, rose 1.2 percent after it said it was comfortable with 2011 consensus forecasts for earnings before interest and tax and said its overall outlook was sound.
Salmon farmer Tassal Group slid 6.3 percent to A$1.645 after saying it had called off takeover talks with suitors, which included private equity firm Pacific Equity Partners. Tassal said bids of up to A$1.90 a share were too low.
It said it was going to pursue a strategic alliance with Singapore-listed frozen fish supplier Pacific Andes Resources Development, which last year bought a 19.8 percent stake in Tassal.
Insurer Suncorp rose 1.6 percent after beating market forecasts for its first-half profit, which fell 39 percent.
Rival Insurance Australia Group rebounded 1.1 percent after saying its maximum exposure to the devastating earthquake in New Zealand would be A$40 million.
Wotif.com , operator of a web site for last-minute hotel reservations, soared 9.2 percent to A$4.97 after saying that bookings over the past 10 days had returned to low double digit growth after a poor start to the second half.
Contractor Macmahon Holdings sank as much as 12 percent and ended down 5.3 percent at A$0.54 after reporting an unexpected first-half loss, hit by writedowns on a rail building contract with BHP Billiton due to delays and rising costs.
Gindalbie Metals jumped 10.9 percent to A$1.225 after it said it had signed a A$57 million contract to supply 60,000 tonnes a month of hematite iron ore to Sinosteel Midwest for eight months, with its first shipment due in April.
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