Australian shares edge down

Australian shares pared intraday gains and ended slightly lower on Tuesday as concerns about a Greek debt default undercut hopes that the US Federal Reserve may delay a rate hike. After rising as much as 0.6 percent, the S&P/ASX 200 index retreated in the afternoon session to finish down 3.0 points or 0.1 percent at 5535.8. New Zealand's benchmark NZX 50 index fell 6.0 points or 0.1 percent to finish the session at 5813.9.
Banks have been heavily sold in recent months on concerns that they will struggle to meet tough new capital requirements and that a lack of interest rate cuts will dampen their traditional appeal with yield-hungry investors. However, newly published minutes from the RBA's meeting reaffirmed the central bank's stance that it would consider further cuts if needed. Bank stocks benefit from rate cuts because they lure more borrowers and make bonds less attractive by comparison.
"There's some expectations of possible further rate cuts," said Lonsec equities strategist Dani Moradi. No 2 lender Westpac Banking Corp said it would raise up to A$700 million ($543.2 million) by selling down its stake in wealth management arm BT, another sign that banks are taking action to build cash reserves as required. Westpac shares were up 1.3 percent, as were Australia and New Zealand Banking Group shares, while Commonwealth Bank of Australia was up 0.8 percent and National Australia Bank was 1 percent stronger.
Shares of insurer Insurance Australia Group jumped 5.2 percent after Warren Buffett's Berkshire Hathaway bought a 3.7 percent stake. New Zealand's most leading stocks were softer with investors seen cashing in on some recent gains amid uncertainty around the Federal Reserve's plans and the Greek debt crisis. Among the bigger gains was chemicals manufacturer Nuplex, up 1.5 percent, and New Zealand Refining, gaining 2.3 percent to a three-month high.