Reuters reported that Australian shares fell 0.7% in trader on November 22nd 2011 as fears over out of control government debt on both sides of the Atlantic sent investors scurrying for safety.

In Europe, Moody's warned about France's rating outlook and Spanish yields rose following the election of a new government, escalating concerns of contagion. The US congressional committee also failed to reach an agreement on reducing US government deficits.

Ms Lucinda Chan division director at Macquarie Equities said that "The super committee in the US, after many, many months of deliberation has come to nothing."

Ms Chan said that investors may also be concerned that a US downgrade could be back on the table. She added that "And Europe was no better because they also have their own issues."

Resources stocks lost ground in early trade after metal prices fell overnight. Rio Tinto fell 2.4%, while Iluka Resources slid 2.7% and Fortescue Metals Group was down 1%. Energy and materials sectors were the weakest performers in morning trade. The benchmark S&P/ASX 200 index eased 29 points to 4,134.0 at 0104 GMT. The index closed 0.3% lower.

Ms Chan said that "Volumes have also been particularly light because everyone has preferred to stay on the sidelines and wait for the storm to go over, before they do anything."

New Zealand's benchmark NZX 50 index was down by 0.4% at 3,243.2.

Australian steel maker OneSteel slid 8.6% to AUD 0.85, a 10 year low. The company faces difficult head winds after iron ore prices fell by almost a third in the space of a month. The company also said at its AGM that conditions for the Australian steel industry remain challenging.

Shares in Australia's largest steelmaker, BlueScope Steel, were placed in a trading halt on November 22nd 2011 after the company announced a heavily discounted AUD 600 million capital raising, to help shore up the company's finances as it battles rising costs and weakening sales.

(Sourced from www.reuters.com)