Close Stocks have ended flat as the fallout of the federal election became no clearer, although miners rose as investors bet a proposed new tax on coal and iron ore profits may never be introduced.
Investors likely face a week's wait before they know who will form a national government and how independents will sway key policies like the mining tax.
At the close, the benchmark S&P/ASX200 Index was down 1.9 points at 4429, while the broader All Ordinaries Index slipped 1.7 points to 4460.4.
On a sector-by-sector basis, telecommunications was the worst off, down 5.6 per cent after Telstra stock plunged as much 6.1 per cent amid uncertainty about the future of the national broadband network and as the company went ex-dividend to the tune of 14 cents.
Financials were down 0.3 per cent but materials rose 0.6 per cent and utilities gained 2.5 per cent.
need2know
- The Australian dollar recovers to above 89 US cents
- In Japan, shares fall to nine-month lows
- Gold ticks higher to $US1228.60
- Oil tops $US74 in recovery
- Dow futures are flat at 10,203
- All of today's and the season's earnings
City Index market strategist Michael McCarthy said the equity market started the session higher, then pulled back, while the Australian dollar shed 1 cent in morning trade but had almost recovered that loss towards the close of trade.
Mr McCarthy said the whole mining sector benefited from the prospect of a win by the Liberal-National coalition, which should see the new mining tax scrapped.
‘‘I suspect that might be a little shortsighted on behalf of the market, with the Greens holding control of the Senate,’’ he said. ‘‘Mining companies and Greens politicians are not natural allies and down the track there may well be measures put in place that impact on resource company profits.
‘‘But in the meantime, the market is quite pleased.’’
Shares in BHP Billiton were up 21 cents at $38.11, Rio Tinto had put on 62 cents to $72.20 and Fortescue Metals Group was steady at $4.64.
Westpac dumped
Investors dumped Westpac on the back of its latest report. Westapc ended 58 cents lower at $22.07 after the bank reported a 27 per cent increase in third quarter cash earnings to about $1.4 billion but said margins had fallen and it remained cautious about the outlook.
‘‘We’re seeing some differentiation in the big four banks,’’ Mr McCarthy said. ‘‘All of them are reporting terrific results based on lower provisioning for bad loans and we’re seeing record profits coming out.
‘‘CBA reported a strong operating environment, ANZ saw some improvements in the operating environment but Westpac has seen some margin contraction ... and I think the market has reacted to that.’’
National Australia Bank finished 25 cents weaker at $23.63, but Commonwealth Bank had put on 20 cents to $49.70 and ANZ had added 17 cents to $22.95.
Foster's jumps
Foster's shares leapt on speculation that brewing giant SAB Miller may seek to swallow the company's Carlton & United Breweries unit. Foster's closed 7.5 per cent higher at $6.26.
Shares in Telstra were down 19 cents, or 6.42 per cent, at $2.77 after the telco went ex dividend.
Making headlines, gloves and condoms maker Ansell said economic uncertainty in some of its major markets remained a concern, but it expected earnings per share to grow in the 2011 financial year. Shares in Ansell were up 34 cents, or 2.7 per cent, at $13.10.
Lihir Gold shareholders backed a $10 billion takeover by Newcrest Mining, leaving the companies one step away from creating the world’s fifth-largest gold miner.
After a trading halt was lifted on both firms, Newcrest rose 17 cents at $35.95, while Lihir gained 2 cents to $4.45.
Among energy stocks, Woodside inched 2 cents lower to $43.20, Oil Search was 1 cent cheaper at $5.87 and Santos put on 6 cents to $14.14.
In the retail sector, Wesfarmers was down 28 cents at $31.70, Woolworths had added 22 cents to $27.31, Myer inched 1 cent higher to $3.70 and JB Hi-Fi was 3 cents firmer at $20.37.
The most traded stock by volume was Telstra, with 93.34 million shares worth $260.2 million changing hands. Preliminary market turnover was 1.6 billion shares worth $4.3 billion, with 444 stocks up, 571 down and 336 unchanged.
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In today's papers
The future of the telecommunications industry remains in limbo this week after the election delivered what is more than likely a hung parliament - with broadband emerging as a key negotiating factor between the major parties and the independents who appear set to hold the balance of power.
Australia's mining community claims that Prime Minister Julia Gillard should abandon the resources tax if she clings to government.
Also in the resources sector, BHP Billiton has bought full-page advertisements in the North American press and will meet investors in bid to sell its $US40 billion offer for Canada's PotashCorp.
And Westpac stands to lose up to $NZ22 million from the collapse of a New Zealand wine grower, with other Australian banks believed to be significantly exposed.
Plus, Ross Gittins says it is time for Labor to ditch the thugs and enunciate some values, Adele Ferguson looks at political instability - months out when the new Senate finally sits - and Barry FitzGerald's Garimpeiro column.
AAP, with BusinessDay