Australia shares dip as rates rise; gold miners up

(Adds closing prices, comment)

By Jonathan Standing

SYDNEY, Nov 3 (Reuters) - Australian shares dipped 0.2 percent in subdued trade on Tuesday, with investors concerned about a shaky global economic recovery and tempted to wager on the nation's most famous horse race instead.

A 0.25 percentage-point rise in Australian interest rates to 3.5 percent was as expected by most in the market ([ID:nSYD339317]), while gold miners lent support after the price of the precious metal rose close to record highs.

"The interest rate decision today sparked a bit of interest but it was a pretty quiet day all round," said James Foulsham, head of trading at CMC Markets, who like many in the market was focused on the Melbourne Cup, run just before the market closed (see [ID:nSP143021]).

"People are a little bit wary at the moment and it wouldn't take much for the market to take another fall...If anything, there's going to be pressure to the downside," he said, noting investors preferred to take profits rather than risks right now.

The benchmark S&P/ASX 200 index <.AXJO> fell 8.9 points to 4,531.5, based on the latest available data.

New Zealand's benchmark NZX 50 index <.NZ50> fell 0.8 percent to 3,158.9.

QBE Insurance <QBE.AX> was among the biggest decliners after it said in an investor update on Monday that gross written premiums would rise less than previously forecast in 2009. Its shares fell 3.9 percent to A$21.29.

Westpac Banking Group <WBC.AX> fell 0.6 percent to A$25.43. It said it would appeal a New Zealand court decision last month that meant it faces a NZ$918 million ($664 million) tax bill over structured finance transactions [ID:nSYU008984].

It will also report full-year earnings on Wednesday.

Among gainers, gold miners benefited from a rise in the gold price to near record highs ([GOL/]), with Newcrest Mining <NCM.AX> up 3.9 percent to A$33.38 and Lihir Gold <LGL.AX> up 4.3 percent to A$3.17.

Department store chain Myer <MYR.AX> recovered some ground after its plunge on debut on Monday, ending up 1.6 percent at A$3.81, but still well below its initial offer price of A$4.10.

Contractor MacMahon Holdings <MAH.AX> jumped 7.5 percent to A$0.57 after it said it had extended an agreement with Leighton Holdings <LEI.AX> on partnering in infrastructure projects. Leighton rose 1.4 percent to A$34.83.

Elsewhere, Air New Zealand rose 1.6 percent to NZ$1.30 after it said it would buy 14 new Airbus planes to replace its domestic fleet of Boeings [ID:nWLF004430]. (Additional reporting by Mark Bendeich)