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Euro waiting game takes its toll on investors

AUSTRALIAN shares closed almost 1 per cent lower, after clawing back some of the session's losses, with investors worried about a critical German vote on the European Union's rescue fund.

AUSTRALIAN shares closed almost 1 per cent lower, after clawing back some of the session's losses, with investors worried about a critical German vote on the European Union's rescue fund.

The bourse opened more than 1 per cent weaker yesterday following the end of a three-day rally on offshore markets.

The benchmark S&P/ASX 200 index fell 31.2 points, or 0.77 per cent, to close at 4008.3 yesterday, while the broader All Ordinaries index lost 29.8 points, or 0.73 per cent, to 4067.9.

The Macquarie Private Wealth division director Lucinda Chan said sentiment was "lower than ever", with markets watching developments on the euro-zone debt crisis closely.

Germany voted to expand the scope and size of the EU's rescue fund - the European Financial Stability Facility - for debt-ridden Greece after the market closed.

Resources stocks registered the biggest falls on the market, with many investors selling in response to heavy falls in commodity prices over the past week and also in overnight trade.

The materials sector was down by 1.6 per cent.

BHP Billiton dropped 48?, or 1.4 per cent, to $35.04, and Rio Tinto lost $1.60, or 2.5 per cent, to close at $62.45.

Gold, silver and copper prices all drifted lower in offshore markets. The spot price of gold in Sydney was trading at $US1623.3 an ounce, down $US29.53 from Wednesday's close of $US1652.83 an ounce.

Energy stocks were weak for most of the session following falling oil prices after data showed a bigger-than-expected increase in energy stockpiles in the United States. But the sector closed 0.33 per cent higher after share prices bounced back.

Oil Search shares lost 5? to $5.62, Woodside Petroleum rose 20? to $32.14 and Santos added 21? to close at $11.27. The uranium miner Paladin Energy plunged 14?, or 10.7 per cent, to $1.17.

Typically defensive health-care stocks also gained ground during the day, with CSL the strongest performing stock on the ASX 100, adding 3.7 per cent to $29.87.

Qantas was down 3?, or 2.1 per cent, to $1.42 after customs workers walked off the job for a second time this week.

More than 8000 domestic and international passengers would have their flights disrupted by strikes today, the airline said.


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