The Australian sharemarket closed marginally weaker after a larger-than-expected interest rate cut by the central bank lifted stocks from steeper lows earlier in the day.
The benchmark S&P/ASX200 index was down 6.4 points, or 0.15 per cent, at 4215.1, while the broader All Ordinaries index shed 3.2 points, or 0.08 per cent, to close at 4169.8.
On the Sydney Futures Exchange, the December share price index futures contract was 35 points higher at 4211.
DJCarmichael research assistant Peter Kopetz said the Reserve Bank of Australia's 75 basis point cut, bringing the official cash rate down to 5.25 per cent, surpassed most analysts' expectations of a 50 basis point cut.
''It suggests the RBA is worried about the health of the Australian economy,'' Mr Kopetz said of the monetary easing, the third consecutive monthly fall in the overnight cash rate, which has now dropped by 2 percentage points since early September.
''I'd be looking at it quite conservatively and be a little bit worried for the next six months. ''There are speed bumps ahead.'' Mr Kopetz said the key indices jumped by about 40 points after the rate cut, which was a ''knee-jerk reaction'', with the market desperately seeking ''a catalyst to move it forward''.
He said the local market ''may have reached its bottom last week at about 3600 points''.
IG Markets research analyst Ben Potter said the Reserve Bank's decision was ''very smart'', increasing the disposable income of consumers before the crucial Christmas trading period, which should boost retail sales. Among the retailers, Woolworths fell 53c to close at $29.10, and Coles owner Wesfarmers was down $1.04, or 4.27 per cent, to close at $22.31. Harvey Norman soared 29c, or 10.74 per cent, to close at $2.99, despite saying written sales at its franchised stores for the 28 days to November 2 fell 0.6 per cent compared with the corresponding period in 2007.
Resources giant BHP Billiton was down 78c, or 2.61 per cent, to close at $29.12, after a fall in the oil price overnight.
Fellow mining giant Rio Tinto dipped $2.29, or 2.79 per cent, to close at $79.71. Among energy stocks, Woodside jumped $1.56, or 3.68 per cent, to close at $43.97, Oil Search fell 11c, or 2.37 per cent, to close at $4.54 and Santos appreciated 15c, or 1.07 per cent, to close at $14.13. ANZ rose 30c to close at $18.80; Commonwealth Bank inched 4c lower to close at $41.80; the National Australia Bank was up 42c, or 1.67 per cent, to close at $25.52; St George Bank put on 83c, or 2.85 per cent, to close at $29.93, and Westpac also gained 83c, or 3.87 per cent, to close at $22.30.
Spot gold was trading in Sydney at $US725.90 an ounce, down $US8.40 on Monday's close of $US734.30.
Among gold stocks, Newcrest was down 59c, or 2.78 per cent, to close at $20.65; Newmont added 10c, or 2.56 per cent, to close at $4, and Lihir Gold gained 7c to close at $2.07.
Building products supplier James Hardie Industries said it would suspend production at two of its plants in the US because of the downturn in the local housing industry.
Its shares were up 17c, or 3.53 per cent, to close at $4.99.
The most traded stock by volume was the satellite communications service provider Newsat, with 62.91 million units changing hands for $126,321.
Its shares added 0.1 of a cent, or 50 per cent, to 0.3 of a cent.
Sharemarket turnover was 951.55million shares, valued at $2.92billion, with 493 stocks up, 390 down and 299 unchanged. AAP