"We actually saw the initial drop following those comments by Treasurer Wayne Swan just lowering forecasts for the GDP growth over the next year or so, that has largely dampened sentiment," said Stan Shamu, Market Strategist IG Markets Sentiment was also hit by a report that Standard & Poors rating agency may give France a negative rating outlook within the next 10 days or so, he added. Australia trimmed official growth and tax revenue forecasts on Tuesday and announced new spending cuts and tax changes to ensure it meets its target to return the budget to surplus in the fiscal year to June 30, 2013. "Let's bear in mind we had a strong rise yesterday ahead of the moves in Europe and the US so to some extend this buying momentum was lead out of Asia yesterday, so we are not following as hard today," said Michael McCarthy, chief market strategist CMC markets. Banks were the worst performers, under pressure as the market tied a line between Europe and local banks, McCarthy said "I can't agree with the reasoning, but I can't dispute the fact that they (banks) are the worst performing sector on the day," McCarthy said. Retailers experienced some relief from recent heavy selling, helped by reports of a robust 16.4 percent jump in US retail sales over the big Thanksgiving weekend. David Jones rose 0.7 percent and Pacific Brands rose by more than 21.9 percent. The benchmark S&P/ASX 200 index slipped 67.1 points to 4,051.1 at 0246 GMT. The index gained 1.9 percent to climb back above the 4,000-level on Monday. "There is a fair bit of risk ahead of tonight's finance ministers' meeting in Europe. We'd suggest that a lot of the action that we'll see as we head to the close today will essentially be position squaring ahead of that," McCarthy said. New Zealand's benchmark NZX 50 index index rose 0.7 percent to 3,241.7. Fletcher Building rose 0.5 percent. STOCKS ON THE MOVE Shares in Rio Tinto slipped 0.3 percent to A$63.07, after Cameco Corp backed out of a bidding war for Hathor, clearing the way for Rio Tinto's C$654 million friendly offer. Pay television firm Austar dropped 2.1 percent to A$1.15. Australia's competition watchdog has again postponed a decision on pay TV group Foxtel's $1.92 billion bid for Austar, this time at the request of Foxtel, sparking talk Foxtel feared the deal was going to be blocked.