SYDNEY: Australian shares closed down 0.64 percent Tuesday after markets around the world slumped on rising fears about European debt and global growth.
The benchmark S&P/ASX 200 briefly entered positive territory during see-sawing trade but ended down 24.9 points at 3,872.1. The market lost almost three percent on Monday.
Dealers said offshore developments were behind the nearly one percent drop at open after the Dow Jones Industrial Average closed down 2.36 percent at 10,655.30, its lowest level since September 2010.
"Unfortunately for investors the start of a new quarter has not heralded a change in sentiment, with the market continuing to grapple with Greece's debt predicament and concerns of a broadening global slowdown," IG Markets analyst Cameron Peacock said.
But the Australian share market regained ground after the central bank decided to keep interest rates at 4.75 percent and hinted that a rate cut could be its next move.
"The fact is that Australia is a very thin market and it always has been this way," said Bell Potter senior adviser Stuart Smith.
"We are spectating, like sitting on the dock of the bay, watching the tide come in and go out," Smith said.
The Australian dollar dropped to its lowest level in a year on Tuesday, dipping below 95 US cents after the central bank announced it would keep rates on hold. The Aussie was trading at 95.14 US cents by 0530 GMT.
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