Falls by financial stocks have kept the Australian share market in negative territory, despite positive offshore leads.

Resources stocks did reasonably well thanks to economic reforms announced in China, but the banks appeared to have hit their top values, IG market analyst Evan Lucas said major.

“It would suggest that normal market conditions are returning,” Mr Lucas said.

“We got good news out of China on the weekend and that’s probably why you’re seeing the resources stocks do quite well because over the long term it will be very beneficial to them.”

A strong session in the US on Friday, where stocks set all time highs, and the economic reforms in China, Australia’s largest trading partner, had been expected to push the local share market higher.

Three of the four major banks dropped, with Westpac down 13 cents at $32.87, ANZ down 18 cents to $32.10 and Commonwealth Bank eased 45 cents to $77.34.

National Australia Bank added six cents to $34.36.

BHP Billiton added six cents to $37.95, Rio Tinto gained 14 cents to $65.65 and Fortescue Metals was five cents higher at $5.89.

Takeover target Warrnambool Cheese and Butter jumped 19 cents to $9.29 after the company’s board backed an increased offer from Canadian dairy giant Saputo.

KEY FACTS

* At the close on Monday, the benchmark S&P/ASX200 index was down 17 points, or 0.31 per cent, at 5,384.7.

* The broader All Ordinaries index was down 18.3 points, or 0.34 per cent, at 5,377.9.

* The December share price index futures contract was 14 points lower at 5,395 with 26,907 contracts traded.

* National turnover was 1.4 billion securities worth $2.8 billion.