News from AAP

China rate cuts fail to ignite Aust market

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The Australian share market faded after a strong start to close flat on Monday.

OptionsXpress market analyst Ben Le Brun said a move by China to cut its interest rates in a bid to stimulate its economy had fired up markets around the world, but the Australian reaction had been muted.

“We were expecting a bonfire of activity this morning – we only got a small spark,” Mr Le Brun said.

“We’ve got to put it down as a disappointing performance.”

Mr Le Brun said cuts to interest rates by the People’s Bank of China should be welcomed by the Australian economy, particularly the miners.

But mining, energy and consumer-related stocks were quite soft.

Mr Le Brun said Australian investors may have decided to pause in the wake a strong market finish last week, before deciding the direction of the next leg.

Among the major banks, National Australia Bank was down two cents at $32.42, Westpac added 28 cents to $31.84, ANZ was steady at $28.90, and Commonwealth Bank lifted 15 cents to $77.50.

In the resources sector, global miner BHP Billiton dipped two cents to $24.57, Rio Tinto firmed 42 cents to $53.81, and Fortescue Metals eased two cents to $2.56.

Bluescope Steel jumped 43 cents to $4.50. Bluescope will keep its Port Kembla steelworks open after the NSW government deferred $60 million of payroll tax for the next three years.

Elsewhere, Network Ten was in a trading halt ahead of what is likely to be the entitlement offer that will give Foxtel a 15 per cent stake in the company.

The broadcaster also reported a full year loss of $312.2 million on the back of a big writedown in the value of its television licence.

Supermarket operator Woolworths stepped forward three cents to $27.84. Woolworths is scrapping frequent flyer points and replacing them with food and liquor discounts in a bid to win more customers and claw back market share.

KEY FACTS

* At 1617 AEDT on Monday, the benchmark S&P/ASX200 index was down 3.6 points, or 0.07 per cent, at 5,348.0 points.

* The broader All Ordinaries index was down 1.8 points, or 0.03 per cent, at 5,386.3 points.

* The December share price index futures contract was up seven points at 5,330 points, with 22,979 contracts traded.

* National turnover was 1.95 billion securities worth $3.6 billion.