MELBOURNE: Australian stocks slipped 1.1 percent on Monday, led down by banks and miners after Standard & Poor's cut the debt ratings of nine of the euro zone's 17 countries, including France, aggravating debt funding problems in the euro zone.
"The downgrade wasn't a complete surprise," said City Index market analyst Peter Esho.
"There will be a lack of any real news flow until mid-week when we get quarterly production reports for the miners. The message from them is they have been selling all the iron ore they can produce," he said.
Shares in Linc Energy fell 3 percent in early trade before recovering to be off 0.4 percent, after surging 17 percent on Friday. The company said it was in discussions with a potential cornerstone investor to develop opportunities in China .
The benchmark S&P/ASX 200 index was down 48.4 points at 4,147.5 at 0012 GMT. The benchmark rose 14.9 points on Friday to end the week 2.1 percent higher.
New Zealand's benchmark NZX 50 index slipped 0.3 percent to 3,216.3.
STOCKS ON THE MOVE
Miners were weaker after a newspaper reported that the Greens, which hold the balance of power in the Australian Senate, want the Labor government to revise the planned profit tax on large iron ore and coal mines.
BHP Billiton lost 1.3 percent to A$36.12.
Shares in poker machine maker Aristocrat fell 3.5 percent to A$2.48 as talks continued between the government and independent MPs on poker machine reforms, including introducing pre-set limits.
Casino owners Echo Entertainment fell 1.3 percent and Crown Entertainment lost 1.4 percent.
Real estate firm FKP stapled securities jumped 3.6 percent to A$0.58 after an unsourced report in the Australian Financial Review said talks were continuing with a Chinese suitor for FKP's A$1 billion retirement villages portfolio.
Mining and exploration company Straits Resources and its partner Argonaut said they lost a court appeal to explore an area in South Australia that they believe holds huge copper and gold resources, sending Argonaut shares down 10 percent to A$0.045. Straits was yet to trade.
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