Let X be a compact normal
complex space on which C∗ acts ‘in a nice manner’. We describe all invariant open
subsets U of X such that the holomorphic map U → U∕C∗ of U onto the
categorical quotient for the category of compact complex spaces, U∕C∗, is
locally Stein. The description depends on a partial ordering of the fixed
point components which arises from the Bialynicki-Birula decompositions of
X.