MELBOURNE: Australian shares fell 0.7 percent on Monday, dragged down by a softer mining sector, and showing little interest in the struggle for leadership of Australia's ruling Labor Party.
Prime Minister Julia Gillard won a leadership showdown with party rival and predecessor as prime minister, Kevin Rudd, with strong backing from her party in a ballot of lawmakers .
"From the point of view of overseas investors, they view Gillard and Rudd as interchangeable, there are no major policy differences," said Ivor Ries, head analyst at E.L. & C. Baillieu Stockbroking.
He said with corporate earnings season nearly over, institutional investors were meeting with companies over the next couple of weeks and assessing the outlook for earnings before making fresh commitments.
"They are looking for where the next EPS momentum plays are," Ries said.
The benchmark S&P/ASX 200 index fell 28.1 points to 4,278.7 at 0240 GMT. The index rose 0.5 percent last Friday, giving the market its first weekly gain in a month.
New Zealand's benchmark NZX 50 index slipped 0.3 percent to 3,309.4.
STOCKS ON THE MOVE
Rare earths miner Lynas Corp fell more than 4 percent to A$1.235 following environmental protests against its ore processing plant under construction in Malaysia.
Top miner BHP Billiton dragged down the overall index, slipping 2.1 percent as its shares traded without rights to the dividend.
Shares in surfwear company Billabong International rose 2.4 percent to A$2.98, after it rejected a A$765 million ($820 million) takeover offer from private equity firm TPG as too low, but said it was still talking with the suitor.
Equatorial Resources finally accepted South African miner Exxaro's offer for African Iron, agreeing to sell its 20.5 percent stake, which clears the way for the offer to be increased to A$0.57 a share, or A$286 million ($306 million).
The news lifted African Iron shares by 2.7 percent, while Equatorial eased 2.4 percent.
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