Stocks end flat as banks weigh

The local sharemarket ended little changed as falls in the banking sector were offset by strength in mining stocks.

Falls in the banking sector were offset by strength in mining stocks. (AAP Image/Mick Tsikas)

The local share market ended the session flat as falls in the banking sector were offset by strength in mining stocks.

At the close of trade, the benchmark S&P/ASX200 was down 4.156 points, or 0.07 per cent, at 5985.6, while the broader All Ordinaries index was down 4.917 points, or 0.08 per cent, at 6070.6.

CMC Markets chief market strategist Michael McCarthy said the pending royal commission into the banking sector continues to weigh on investor sentiment.

“I think it reflects a lot of uncertainty as to what’s in the pipeline,” he said.

“Until the terms of reference are published, we’re likely to see sentiment shift a number of times in the sector. Once we know exactly what the royal commission will be examining and how that might impact on the banks, investors are likely to extrapolate that into any potential regulatory changes 12 months down the track.

“But until we get those terms of reference, we could see swings like we’re seeing in that sector today.”

Mining stocks made gains after the iron ore price surged above US$70 a tonne for the first time in 2.5 months at the weekend, according to the Metal Bulletin iron ore index.

BHP Billiton gained 1.56 per cent to $28.01 while Rio Tinto swelled 1.24 per cent to $72.05.

Energy stocks were flat despite a spike in the oil price after OPEC last week extended the production cut agreement well into 2018.

“Saudi Arabia’s suggestion that it will scrutinise any member that exceeds quotas saw investors become more comfortable about the short-term tightness in the market,” said ANZ senior economist Daniel Gradwell.

Woodside Petroleum inched up 0.03 per cent to $31.39, while Origin Energy strengthened 0.33 per cent to $9.10. Santos lowered 0.19 per cent to $5.13.

In financials, NAB edged down 0.51 per cent to $29.47, Commonwealth Bank ticked 0.32 per cent lower to $79.92, Westpac sunk 1.24 per cent to $31.17 and ANZ fell 1.01 per cent to $28.33.

Bank of Queensland slid 1.61 per cent to $12.82, while Bendigo and Adelaide Bank dropped 1.43 per cent to $11.69.

Elsewhere, Telstra gained 2.34 per cent to $3.50 after an upgrade by Macquarie.

Grocery wholesaler Metcash gained 9.09 per cent to $3.00 after it announced a 24 per cent lift in half-year profit due to strength in its liquor business and Home Timber & Hardware chain. Wesfarmers added 0.07 per cent to $43.92 and Woolworths lost 0.07 per cent to $26.85.

G8 Education plumetted 23.08 per cent to $3.40 after the child care operator forecast lower earnings for the 2017 financial year and warned investors of a challenging six to nine months ahead.

Crown Resorts lost 1.78 per cent to $12.11 after it was hit with a class action alleging it did not accurately inform the market of risks its activities in China, ahead of the arrest of 18 employees and a plunge in the company’s share price.

The Australian dollar was trading slightly lower at US75.97c in late trade.