The Australian share market closed flat after the banks lost most of their early gains as China’s Shanghai Composite fell more than three per cent.
Early gains in the banking sector pushed the benchmark S&P/ASX 200 to an intra day high of 4925.7 points, before closing up 0.02 per cent to 4,880.9 points.
Despite relatively strong profit results from local companies in February, the Australian market has underperformed major indexes such as Japan’s Nikkei 225, London’s FTSE 100 and the US’s S&P 500, Bell Direct equity analyst Julia Lee says.
“I think a big factor in the underperformance is the financial stocks and how they’ve been performing,” Ms Lee said.
Australian banks have lost around 17 per cent of their value over January and February, she noted.
The local banks have been caught up in the international sell off in banking stocks. Plus, heightened talk about a local residential market bubble has hurt the sector.
The Commonwealth Bank of Australia dropped 58 cents to $70.14, National Australia Bank fell 22 cents to $24.19 and ANZ Bank fell 16 cents to $22.40.
Westpac was the only major bank to finish 19 cents higher at $28.75.
Mining giant Rio Tinto closed 28 cents stronger at $40.28, while BHP Billiton fell two cents to $15.57.
Woolworths regained some lost ground, finishing 56 cents higher at $22.90 on bargain hunting, Ms Lee said.
The stock fell to a 10 year low of $20.50 on Friday after the retailer reported a $2.09 billion interim loss because of its troubled home improvement chain Masters.
Slater & Gordon shares dropped 25 cents to 58 cents after the law firm reported a $958.3 million interim net loss because of its troubled UK business.
The law firm is now at the mercy of its lenders, Ms Lee said.
KEY FACTS:
* The benchmark S&P/ASX200 index closed up 0.9 points, or 0.02 per cent, at 4,880.9.
* The broader All Ordinaries index was up 2.8 points, or 0.06 per cent, at 4,947.9
* The March share price index futures contract was 21 points higher at 4,874, with 37,522 contracts traded.
* The price of gold in Sydney at 1700 AEDT was $US1,228.10 per fine ounce, down $US11.00 on Friday’s price of $US1,239.10.
* National turnover was 1.89 billion securities traded, worth $5.38 billion.
