SYDNEY/WELLINGTON: Australian shares edged higher on Tuesday, but held near three-week lows as an uninspired performance on Wall Street, a slump in gold prices and a dip in business conditions tempered the mood.
Gold miners declined as bullion fell 1.2 percent to a fresh three-month low overnight, losing some of its safe-haven lustre after a ceasefire between Ukraine and Russian rebels took effect on Friday.
Australia's top gold miner Newcrest Mining Ltd dropped 1.9 percent, while Beadell Resources Ltd lost 0.6 percent. Elsewhere, a measure of Australian business conditions pulled back from four-year highs in August as sales and profits eased.
Matthew Sherwood, head of investment market research at Perpetual, said investors were worried about the faltering recovery in Japan and the possibility of Scottish independence form the United Kingdom.
"That's really keeping a lid on any upside to the market -there are headwinds and there are risks to be managed," said Sherwood. The S&P/ASX 200 index added 9.8 points to 5,586.8 by 0246 GMT after hitting an intraday high of 5,591.5. The index dipped 0.4 percent on Monday.
The Australian benchmark jumped to a six-year peak of 5,679.5 on Aug.21, underpinned by a largely positive earnings, especially for big cap banks and miners.
Since then, however, global growth worries, geopolitical tensions and a sharp drop in iron ore prices dragged on the market.
On Tuesday, blue-chips like Australia's biggest telecommunications provider Telstra Corporation Ltd added 0.4 percent, blood products maker CSL Ltd rose 0.8 percent, and Australia's largest supermarket chain by market share Woolworths Ltd tacked on 0.1 percent.
The banking sector was steady with Australia's largest bank by market capitalisation, Commonwealth Bank of Australia , up 0.2 percent. The nation's oldest bank, Westpac Banking Corp, rose 0.1 percent.
The S&P/ASX 200 Bank Index is up 3.9 percent so far this year, slightly below the broader market's rise of 4.4 percent. "A lot of retail investors rely on the banks for income through fully franked dividends which still remain very much attracted to them," said David Ellis, head of banking research at Morningstar.
Brambles Ltd was trading 0.5 percent lower after announcing the acquisition of UK-based container company Ferguson Group in a deal worth $545 million.
WorleyParsons Ltd climbed 1 percent after saying it will acquire hydrocarbons management consulting firm Mtg Ltd. New Zealand's benchmark NZX-50 index slipped 2.66 points to 5,259.09, easing from a record closing high of 5,261.75 hit on Monday.
Losses were led by OceanaGold Corp, which fell 7.3 percent to a three-month low of NZ$2.80 ($2.31), as the Australian gold miner which is dual listed in New Zealand suffered from a slide in gold prices.