After jumping out of the blocks this morning on the back of a strong lead from global markets, the Australian stock exchange fell away in the afternoon to finish 1.1% lower. This morning the banks rallied, while the miner’s were flat ahead of tonight’s budget where the government will confirm the 40% super profits tax.

Late in the day trade shares fell away as the Euro currency gave up gains from Monday's strong rally. The selling of the Euro pointed to concerns that the $1 trillion Greek debt and Euro defence fund was just a very large band-aid to the European debt crisis, without addressing the underlying problems.

A further catalyst to the sell-off on the Australian domestic market was Chinese economic data showing inflation at 18-month highs, with investors nervous it will prompt the Chinese central government to reign in spending and economic growth.

At the end of the day, the All Ords dropped 49.0 to 4,573.2, while the ASX/200 lost 51.8 to 4,548.0. Around 2.2 billion shares worth around $5.9 billion had changed hands.

The Banks and Financials sector fell 1%.

CBA was the worst performer, down 1.6% to $54.85. 

Meanwhile, NAB and ANZ were both 1.1% in the red, while Westpac weakened 0.8% to $24.82.

Investment bank Macquarie lost 70c, or 1.5% to $45.92.

IAG was the weakest of the insurers, down 5c to $3.70. The insurer came out this morning warning shareholders to ignore unsolicited share purchase offers.

Westfield, meanwhile, dipped 18c to $12.18 as the Property Trusts sector shed 0.6%.

BHP Billiton fell 87c to $38.13, while Rio Tinto lost $1.70 to $67.10 as investors booked profits following strong gains yesterday.

The broader Materials and Resources sector drop 2.2%.

In sector news, Xstrata placed all of its projects in Australia under review, as a result of the government’s proposed 40% tax on mine profits.

Macarthur Coal continued to lose ground following the decision by US coal giant Peabody to reduce its offer to $15 per share in the light of the government’s super tax. The company’s shares closed at $13.12 each.

Gold plays, Newcrest and Lihir were down 0.7% and 0.5% as the precious metal showed surprising resilience to yesterday’s flight to riskier and more rewarding investments.

Fortescue slumped 22c, or 5.0% to $4.16.

In the materials sector, Incitec Pivot lost 12c, or 3.8% to $3.06. The fertiliser manufacturer received mixed reviews in this morning’s broker reports following a profit announcement yesterday, which was bolstered by a reduction in one-off impairments.

Energy stocks were 1.4% lower as Woodside, the sector’s largest stock, losing 78c, or 1.8% to $42.68.

Oil Search and Origin shed 1.1% and 1.2% to $5.58 and $15.08.

Paladin shares were up 1.3% to $4.00 each as Canadian miner Uranium One continues to snap up shares in the Aussie miner.

Qantas rallied 6c, or 2.3% to $2.64, while smaller rival Virgin Blue slid 1% to 51c after two analysts confirmed ‘buy’ ratings on the airliners.

The Industrials sector was flat.

Seven Holdings, which moved from the media space down to Industrials following its merger with Westrac, lost 31c, or 4.3% to $6.82.

Brambles gained 0.6% to $7.00 and Leighton shed 0.5% to $34.10.

Consumer Discretionary stocks were mixed resulting in the sector only being down 0.1%.

JB Hi-Fi put on 31c, or 1.6% to $19.28 to be the strongest among the retailers.

Flight Centre reversed early gains to close 34c lower at $18.21.

Consumer Staples slid 0.7% after Wesfarmers lost 1% to $28.40.

Telstra edged 2c lower to $3.03, while the broader Telecommunications sector was 0.7% below the gain line.

Around the region, the Nikkei 225 shed 119.6 to 10,411.1, while the NZSE50 dipped 3.6 to 3,167.0. The Strait Times Index lost 27.7 to 2,852.8. The Hang Seng fell 291.3 to 20,135.4.

Spot gold was trading at US$1,205.86 per ounce, while the Aussie was buying US$0.8958.

The offer of Shares pursuant to this Prospectus does not constitute a public offer in any jurisdiction outside Australia and New Zealand. This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. No action has been taken to register or qualify the Shares or the Offer, or to otherwise permit a public offering of the Shares in any jurisdiction outside Australia and New Zealand. This Prospectus has been prepared for publication in Australia and New Zealand and may not be released or distributed in the United States of America.
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