Australia's benchmark stock index wobbled on Wednesday as a...

Australia's benchmark stock index wobbled on Wednesday as a positive lead from Wall Street was offset by a plunge in shares of the country's biggest telecommunications company, Telstra.

Telstra Corp's (TLS) shares sank 8 percent at one point after it dropped a plan to raise A$5.5 billion ($4.4 billion) by selling income it receives from a government-owned broadband network. It also went ex-dividend.

"Telstra is what’s dragging the index towards negative territory. Outside Telstra, I think it’s just a case of the market broadly remaining a bit nervous, being a bit unconvinced by this rally at this stage." said Ric Spooner, chief market strategist at CMC Markets.

The S&P/ASX 200 index (xjo) was marginally lower at 0.04 percent, or 2.412 points to 5,666 at 0233 GMT. The benchmark fell 0.7 percent on Tuesday.

Telstra's slump pulled the telecommunications index .AXTJ down 5.2 percent.

The benchmark index had opened higher, following three days of losses, tracking gains on Wall Street as geo-political tensions over the Korean Peninsula eased. [.N]

"The U.S. steadied a little bit overnight. I think we were really just following that pattern. (Aussie) market steadied somewhat today, but it doesn’t change the overall direction of our market, which is essentially flat," said Ric Spooner.

Gains were led by the consumer staples sector, with Graincorp Ltd (GNC) rising as much as 8.1 percent and Bega Cheese Ltd (BGA) up as much as 3.3 percent.

The metals and mining index .AXMM gained 0.4 percent, receiving some support from rising copper and nickel prices amid a fall in inventories and supply disruptions. [MET/L]

Copper miner OZ Minerals Ltd (OZL) climbed as much as 2.2 percent, while BlueScope Steel Ltd (BSL) rose as much as 2.9 percent.

Data earlier in the day showed the value of construction work done in Australia in the June quarter in seasonally adjusted chain volume terms increased 9.3 percent, beating analysts estimates; whereas monthly building approvals fell 1.7 percent.

New Zealand's benchmark S&P/NZX 50 index (nz50) rose 0.5 percent, or 36.47 points to 7,774.81, rebounding after four days of losses.

The telecommunication and industrial sectors were the biggest gainers, with telecom and digital service supplier Spark New Zealand Ltd (SPK) and Auckland International Airport Ltd (AIA) gaining as much as 1.6 percent and 0.9 percent respectively.

Chorus Ltd (CNU) climbed as much as 1.2 percent, after falling for three sessions as it reached an agreement with Crown Fibre to extend its broadband rollout.

($1 = 1.2530 Australian dollars)