MELBOURNE: Australian stocks eased 0.5 percent on Tuesday, pressured by falls in global equities markets in a fresh flight from riskier assets, but losses were limited after steep declines on Monday.
"Everyone is looking for a bottom at the moment, everyone is nervous," said Patersons Securities dealer Martin Angel.
"It's going to continue to be volatile and you've just got to ride it through. People are talking about a massive slowdown in China but they are still going to need a serious amount of resources to keep their economy going," said Angel.
Indeed, the top miners that export to China fared better on Tuesday than the major banks, where worries about the increased cost of funding pushed losses to between 0.2 percent and 1.0 percent, led down by National Australia Bank's 1 percent fall.
The benchmark S&P/ASX 200 index was down 21.2 points at 3,875.8 at 2352 GMT. The index slid 2.8 percent on Monday in light trade.
New Zealand's benchmark NZX 50 index fell 0.4 percent to 3,301.9.
Among the retailers David Jones slid 6 percent to A$2.85 and Just Jeans owner Premier lost 5.5 percent to A$5.10.
STOCKS ON THE MOVE
Shares in global miner Rio Tinto touched a two-year low as metals prices slipped. Investors are worried about the risks of a global recession following on from Greece's financial turmoil and steep losses for European banks.
The shares traded as low as A$58.52, the lowest since Oct 6, 2009, before recovering to A$59.20.
Defensive stocks outperformed, including telecoms group Telstra up 0.3 percent and supermarket Woolworths off 0.1 percent.
2350 GMT
Shares in Empire Oil & Gas NL added 3.3 percent after it said it entered into gas supply agreement with Alcoa of Australia Limited.
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