SYDNEY/WELLINGTON, July 5 (Reuters) - New Zealand shares edged slightly higher on Tuesday, while Australian shares fell 0.96 percent, with the financial sector hgardest hit.
The S&P/ASX 200 index .AXJO lost 50.88 points to reach 5,230.9 points by 0204 GMT on Tuesday.
"The selling is broad based, with only the materials sector in the green on the back of stronger iron ore prices and continued interest in gold plays," said Chris Conway, Head of Research at Australian Stock Report.
"With vote counting resuming today regarding the Federal election, that's another risk that has been brought to the fore and traders and investors are simply booking some gains.
"We had nothing in the way of positive leads this morning and with U.S. markets closed (on Monday), it gave little direction."
Financials led the index lower, ahead of a central bank meeting later on Tuesday where rates are expected to be held at all-time lows.
Stock prices for all four major banks edged lower. Commonwealth Bank of Australia CBA.AX was down 1.06 percent, Westpac Banking Corp WBC.AX fell 1.35 percent, National Australia Bank Ltd NAB.AX lost 1.76 percent and Australia and New Zealand Banking Group Ltd ANZ.AX was 1.43 percent lower.
Wesfarmers Ltd WES.AX shares tracked 1.5 percent lower and resources stocks reversed early gains, with BHP Billiton (LON:BLT) falling 0.31 percent and Fortescue Metals Group FMG.AX dropping 1.41 percent, even as iron ore prices rallied.
Stocks in mining junior Western Areas Ltd WSA.AX surged 5.65 percent on higher nickel prices. Whitehaven Coal Ltd WHC.AX rose 5.56 percent and mining services operator Worley Parsons Ltd WOR.AX climbed 2.4 percent.
Shares in medicinal marijuana producer MMJ Phytotech gained 8.51 percent on news that Canadian health authorities had moved closer to legalising the drug.
Woodside Petroleum Ltd WPL.AX and Oil Search Ltd OSH.AX shares both tracked oil prices lower, with Woodside losing 0.52 percent and Oil Search falling 0.14 percent.
New Zealand's benchmark S&P/NZX 50 index .NZ50 was trading 0.3 percent higher or 21 points at 6,960.73 on Tuesday.
Sentiment got a lift after New Zealand business confidence rebounded in the second quarter, a private think tank said on Tuesday were chasing yield in a low interest rate environment, said Macquarie Equities Investment Advisor Brad Gordon.
The biggest gainers were Meridian Energy MEL.NZ , which rose 2.5 percent and Skellerup SKL.NZ , which rose 1.6 percent.
The biggest losers included Genesis Energy GNE.NZ , down 1.6 percent.
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