SYDNEY: Australian shares slipped 0.7 percent on Tuesday, but ended well off the days lows, with fears about the ability of politicians on either side of the Atlantic to tackle huge debt burdens continuing to weigh on investor confidence.
With major European and US markets falling sharply on Monday, along with prices for raw materials such as copper and oil, Australia's resilience was notable.
"A surprisingly strong performance from the Australian market today, given the negative leads we have seen not only from overseas share markets but from commodity markets," said Michael McCarthy, chief market strategist CMC markets.
"It was interesting to note an acceleration of volume at the bottom of the range today, when the market fell below 4,100 on the 200 index we saw a good pick up in volume suggesting that the dynamic we've been watching for the last week where investors are buying on the back foot was in play again today," he added.
The benchmark S&P/ASX 200 index fell 30 points to 4,133.0, according to the latest data.
"It's a bit early to call it, but there is the potential given the better economic outlook in Australia for it to disconnect slightly from the European and US markets," said McCarthy.
New Zealand's benchmark NZX 50 index fell 4.3 points to 3,252.3.
The industrial sector was the hardest hit on Tuesday with Toll Holdings falling 3.3 percent.
Australian steel maker Onesteel slid 10.8 percent, to A$0.83, marking a 10-year low, after BlueScope Steel , a company that faces similar headwinds to Onesteel, announced a heavily discounted $600 million ($590 million) capital raising.
BlueScope hopes the capital raising will help shore up the company's finances as it battles rising costs and weakening sales. The company remains in a trading halt.
Qantas Airways closed down 4.3 percent after union talks failed, with parties now forced to accept a future settlement imposed by Australia's industrial umpire.
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