Close Australian stocks closed a touch higher in a late rebound spurred by top home lenders, after disappointing third-quarter GDP data reinforced views interest rates would be on hold for some time.
The benchmark S&P/ASX200 index rose 2.2 points to 4586.6, after earlier falling as low as 4557. The broader All Ordinaries index inched up 0.4 points to 4676.8.
Gains in the materials sector, which rose 0.9 per cent, were offset by falls in energy shares, down 0.6 per cent, and the industrials sector which was 0.5 per cent lower. Financials slipped 0.1 per cent.
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The market has been treading water for about a week, drifting up and down daily on euro-zone debt worries, speculation on Chinese moves to cool growth, tension in the Korean peninsula, and domestic economic sentiment heading into Christmas.
While some expect the market to continue to trade sideways for some time, some see it climbing in the lead-up to Christmas following a 1.7 per cent drop in November.
Outlook brightens
"I'd be inclined to say we'll do a bit better than tread water (in December)," said Michael Heffernan, senior client adviser at Austock Group.
"I can't see anything coming out of left field now that's going to surprise us on the downside. The information coming out of America is all pretty positive. With no interest rate rises here, that's got to be positive," he said.
Further rate rises were seen less likely after third-quarter GDP growth data came in weaker than expected at 0.2 per cent, the slowest pace in nearly two years.
"The data that came out today validates some of the comments that have been circulating - that rates are likely to be on hold well into the new year," said Jamie Spiteri, senior dealer at Shaw Stockbroking.
That helped the banks as home buyers have been seen holding back for fear of further rate hikes following a string earlier this year.
Banks in late rally
Top home lender Commonwealth Bank of Australia rallied in late trade to close up 0.5 per cent, or 24 cents, to $48.52 and Westpac rose 0.4 per cent, or 8 cents, to $21.45, after both had traded around 1 per cent lower.
But it failed to boost the retailers, with top grocer Woolworths falling 20 cents softer, or 0.8 per cent, to $26.60, department store chain Myer sliding 1.9 per cent and electronics retailer JB Hi-Fi tumbling 3 per cent. David Jones was down 5 cents, or 1.1 per cent, at $4.37 and Harvey Norman was 1 cent lower at $2.98.
National Australia Bank finished down 15 cents at $23.30, ANZ inched 1 cent lower to $22.65 and Macquarie Group fell 52 cents, or 1.5 per cent, to $34.93.
In the mining sector, BHP Billiton was up 46 cents, or 1.1 per cent, at $43.20, Rio Tinto appreciated 89 cents, or 1.1 per cent, to $83.10 and Fortescue gained 3 cents to $6.35.
Rio Tinto said it would spend $US1.2 billion to increase iron ore production at its operations in Western Australia’s Pilbara region to 283 million tonnes per annum (Mtpa), from about 220 Mtpa currently.
Among energy stocks, Woodside was down 66 cents, or 1.6 per cent, at $41.29, Oil Search was steady at $6.83 and Santos eased 5 cents to $12.38.
Gold miner Newcrest was up 4 cents at $39.69.
Traffic can't boost Qantas
In the headlines, figures released by Qantas show the airline was carrying more passengers than a year ago but revenue per seat was falling. Qantas shares were down 2 cents at $2.61.
The best performing stock on the S&P/ASX 100 index was rare earths explorer Lynas Corporation, up 10 cents, or 6.41per cent, at $1.66. The worst performing stock on this index was JB Hi-Fi, down 57 cents, or 3 per cent, at $18.40.
Beadell Resources was the most traded stock by volume, with 130.49 million shares worth $70.21 million changing hands. Beadell shares finished up 5 cents, or 8.9 per cent, at 61 cents, after announcing it had discovered high-grade gold mineralisation in Western Australia.
Preliminary market turnover reached 2.33 billion shares worth $4.46 billion, with 489 stocks up, 615 down and 371 unchanged.
CMC Markets analyst Anthony Whitaker said the market faced several fronts of worry, such as the euro-zone debt issues and China's potential slowdown.
"A perfect storm could send shares tumbling," he said. "On the other hand, there’s also some scope for a sharp rally if the international environment improves.
"The default position is to move sideways – something we’ve being seeing a lot of recently."
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AAP, Reuters, with BusinessDay