SYDNEY: Australian shares slipped 0.4 percent on Monday as investors paused after slower-than-expected U.S growth and ahead of a possible debt swap deal for Greece, with the market also waiting on another European meeting to set up a permanent bailout fund.
The Greek debt swap deal is crucial to avoiding a messy default. Greece appeared to be close to clinching a bond swap agreement with private creditors, and Prime Minister Lucas Papademos sought backing from leading Greek party leaders for painful reforms.
Separately, European leaders were set to sign off on a permanent rescue fund for the euro zone on Monday.
"Although many are beginning to think the worst is over regarding the European crisis, some analysts feel this is a dangerous assumption to work on," said Stan Shamu, market strategist at IG Markets.
He said liquidity additions had reinforced the banking sector, but governments appeared not be showing the urgency sought by markets and central banks to ensure economies regained competitiveness.
The benchmark S&P/ASX 200 index fell 15.7 points to 4,272.7, according to latest available data. The index rose 0.4 percent on Friday and is up 5.3 percent so far in January, set to post its first month of gains since October.
Miners slipped with Rio Tinto down 1.1 percent to A$69.00 after underwhelming US economic growth data doused a rally by commodities.
The top four banks were all lower, with No.3 Westpac banking Corp leading with a 0.9 percent fall to A$21.10. The leading four Australian banks raise $100 billion a year primarily from the United States and Europe.
Guildford Coal climbed 5 percent after it said it had won a mining licence in Mongolia.
Arc Exploration fell 28.6 percent to half a cent. It said Indonesian authorities have revoked an exploration license held by its local partner PT Sumber Mineral Nusantara, citing civil disturbances.
New Zealand's benchmark NZX 50 index rose 0.4 percent at 3,307.22.
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