australian stocks erase early losses and manage to close above the red line 1601902015

Australian stocks started the week on a cautious note, ending marginally in positive territory, as investors mostly preferred to stay on the sidelines pending more clarity on the Greek situation. However, the big banks were bid up and continued their upside momentum from the solid gains in the previous session.

Indices and sectors

The benchmark S&P/ASX 200 rose 13.2 points, or 0.2 per cent, and closed at 5,610.2, while the broader All Ordinaries index was up 11.6 points, or 0.2 per cent, at 5,603.10.

The biggest gaining sectors were real estate investment trusts (+1.92 per cent), utilities (+1.15 per cent), telecommunications services (+0.88 percent) and financials (+0.68 per cent). The sectors that ended in the red included industrials (-0.77 per cent), consumer staples (-0.43 per cent), materials (-0.34 per cent) and healthcare (-0.27 per cent).

Stocks

Mining stocks closed mixed. BHP Billiton Limited (ASX:BHP) lost 0.32 per cent to AU$28.32, Rio Tinto Limited (ASX:RIO) moved higher by 0.45 per cent to AU$55.80 and Fortescue Metals Group Limited (ASX:FMG) shot up 1.85 per cent to AU$2.20.

In energy, except Woodside Petroleum Limited (ASX:WPL), which gained 0.53 per cent to AU$35.83, other stocks ended with losses. Origin Energy Ltd (ASX:ORG) was down 1.15 per cent to AU$12.90, Oil Search Limited (ASX:OSH) fell 0.27 per cent to AU$7.49 and Santos Ltd (ASX:STO) declined 1.44 per cent to AU$8.24.

The big four banks all ended in positive territory. Commonwealth Bank of Australia (ASX:CBA) rose 0.65 per cent to AU$85.02, Westpac Banking Corp (ASX:WBC) was higher by 0.98 per cent to AU$33.12, Australia and New Zealand Banking Group (ASX:ANZ) rose 0.49 per cent to AU$32.92 and National Australia Bank Ltd. (ASX:NAB) gained 0.33 per cent to AU$33.77.

Shares of IOOF Holdings Limited (ASX:IFL), the financial services giant, plunged over 13 per cent to AU$9.24 following reports that Fairfax Media had amassed internal documents and whistleblower testimony in connection with allegations of insider trading and compliance issues at the firm, according to ABC.

Retailers closed mixed. Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, was up 0.17 per cent to AU$40.27, Caltex Australia Limited (ASX:CTX) gained 0.30 per cent to AU$32.91 and Myer Holdings Ltd (ASX:MYR) shot up 2.73 per cent to AU$1.32. However, Woolworths Limited (ASX:WOW) fell 1.6 per cent to AU$26.86.

Economic news, currency and market outlook

New Greek proposals that included higher taxes and curtailment of early retirement, aimed at reaching a last-minute deal to ease Greece’s debt crisis and avert a looming default, have raised hopes that the country could reach an understanding with its creditors. However, the Eurozone leaders who arrived in Brussels on Monday for an emergency summit voiced only cautious optimism that the new proposals could ultimately lead to a solution, according to the ABC.

Stocks rose on Wall Street on Friday, driven by relief surrounding the improving Greek situation. The Dow Jones Industrial Average rose 104.53 points, or 0.58 percent, to 18,120.48 and the S&P 500 gained 13 points, or 0.62 percent, to 2,122.99. The Nasdaq Composite added 36.97 points, or 0.72 percent, to 5,153.97, a new closing record.

The Australian dollar is trading softer following rising hopes that Greece would be able to thrash out its bailout agreement, according to the Business Spectator. At 06:30 this morning (AEST) the Aussie was trading at 77.27 US cents, down from 77.90 US cents on Monday.

The Australian stock market is likely to open higher today given that at 06:50 am (AEST) this morning the September ASX SPI200 Index (AP) Futures was up 21 points at 5,576, according to Business Spectator.