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Australia shares off lows as jobs top forecast

australia-stock-exchangeMELBOURNE: Australian shares fell 0.8 percent on Thursday, paring steeper losses after local October employment figures topped expectations with a steady jobless rate of 5.4 percent, a modestly encouraging report that boosted the local dollar.

 

"The full-time component has been up for four consecutive months now," said Su-Lin Ong, senior economist at RBC Capital Markets.

 

"You've got to take the numbers at face value and they suggest a moderate-type economy," she said.

 

The benchmark S&P/ASX 200 index was down 35 points at 4,481.2 by 0332 GMT, off a session low of 4,459.9. It rose 0.7 percent to 4,516.5 on Wednesday, a one-week closing high.

 

New Zealand's benchmark NZX 50 index rose 0.2 percent to 3,954.2.

 

The market started out lower in a broad-based drop spearheaded by losses in top miners, energy firms, banks and telecom Telstra Corp after all major US stock indexes fell more than 2 percent.

 

Following US President Barack Obama's re-election, investor attention turned to the looming "fiscal cliff" debate in the United States and Europe's economic troubles, and copper dropped to a two-month low and Brent crude fell nearly 4 percent.

 

"Our equities market now will be in a bit of a risk-off phase," said Credit Suisse equity strategist Damien Boey.

 

In the short term, he said defensives and larger resource companies may be flat to up but banks could retreat, with the overall market unlikely to sustain an advance.

 

"I'd be expecting the market to pull back a bit. Our batting order at this stage is defensives, resources, banks," he said.

 

Copyright Reuters, 2012