MELBOURNE: Australian shares wiped out gains to fall 0.6 percent on Tuesday afternoon after the country's central bank surprised the market by holding rates steady at 4.25 percent, despite uncertainty over global growth.
Top bank NAB remained the market's biggest loser, falling 4 percent, as it finally decided to review its UK operations after holding back during asset sales by others in the UK last year.
Rivals Commonwealth Bank of Australia, Westpac Banking Corp and Australia and New Zealand Banking Group which do not have the same exposure to Europe had all been trading higher, but dropped after the rate decision.
Retailers were also hit as the market had been betting on a rate cut to help resuscitate consumer spending.
Department store Myer Holdings fell 2.4 percent and rival David Jones fell 1.8 percent. Woolworths fell 0.4 percent after trading higher earlier in the day.
That helped to push the benchmark S&P/ASX 200 index down 23 points to 4,272.8, paring Monday's 1 percent rise.
New Zealand's benchmark NZX 50 index ended up 2.9 points at 3,315.1.
STOCKS ON THE MOVE
Top investment bank Macquarie Group sank as much as 5 percent after it warned its full-year profit was likely to slide 25 percent, well below market forecasts. Its shares later recovered to trade down 0.7 percent.
Craig Young, who helps manage $22 billion at Tyndall Investment Management, said a downgrade had been expected. "The quantum is probably a little bit worse than expected," he said.
Hearing implant maker Cochlear rose 7.6 percent to a one-month high after reporting a first-half profit of A$80.2 million, excluding a charge for a key product recall.
0012 GMT
National Australia Bank fell more than 3 percent after moving to review its underperforming UK operations and warning that conditions were challenging as it reported a 7.7 percent rise in first-quarter cash profit.
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