Australian stocks ended little changed on Monday, with some relief on European bank stress tests offset by uncertainty over a US debt deal, while News Corp shares took another hit. News Corp shares tumbled more than 7 percent to two-year low, as the phone hacking scandal fallout worsened, before finishing down 4.1 percent.
Analysts said the broader market would make little headway until there was a clear resolution to the US debt ceiling negotiations and to the European debt crisis. The start of the profit reporting season in a couple of weeks is also expected to prompt more earnings downgrades from industrial companies that are not exposed to the nation's mining boom.
In the retail sector, where the downgrades have already begun, department store Myer suffered another 1.7 percent fall after steep losses last week.
The benchmark S&P/ASX 200 index was off 1.5 points at 4,472.0. The benchmark slipped 0.4 percent on Friday, led down by top miner BHP Billiton after it announced a $12.1 billion bid for US shale gas producer Petrohawk .
New Zealand's benchmark NZX 50 index dropped 0.6 percent to 3,385.9. NZ's annual inflation rate rose to a 21-year high in the June quarter, adding to chances of the Reserve Bank of New Zealand (RBNZ) could hike interest rates before the end of the year.
A slide in the shares of Macquarie Group, down 1.3 percent, rekindled calls for job cuts, share buybacks or a break up of Australia's top investment bank.
Macquarie's shares have fallen 16.5 percent since June 1 to their lowest in more than two years as weak markets hurt its investment banking and trading business, turning valuations attractive. For details, see Strategic merger activity helped to underpin the resources sector. Shares in Sundance Resources jumped as much as 27.5 percent after it got a A$0.50 a share take-over proposal from its largest shareholder, Hanlong Mining of China, valuing the company at around A$1.4 billion ($1.5 billion). The shares closed 22.5 percent higher at A$0.49 and topped the most actives list.
Shares of energy group Eastern Star Gas Ltd jumped after Santos Ltd agreed to buy the firm in an all-share deal valued at A$924 million ($983 million), while Santos shares eased. Eastern Star Gas shares ended up 41.2 percent at A$0.84 a share, below the A$0.90 implied value of the deal, while Santos shares were down 3.7 percent.
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