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MELBOURNE - The Australian share market has clawed back substantial early losses to close marginally weaker.
A strong rally on Japan's Nikkei index and the odd bright spot among company announcements helped the local market to change direction in afternoon trading but not enough to put it in the black.
At the 1615 AEDT close, the benchmark S&P/ASX200 was 14.6 points softer, or 0.38 per cent down, at 3,794.6.
The broader All Ordinaries was 12.9 points, or 0.34 per cent, lower to 3,755.4.
On the Sydney Futures Exchange, the December share price index futures contract was nine points higher at 3,800 on a volume of 32,453 contracts.
Macquarie Equities adviser Helen Spencer said the local market had been boosted in afternoon trading by a strong performance on the Nikkei and investors moving into defensive stocks.
"We started on a very much weaker note despite higher commodity prices," Ms Spencer said.
"The positive result on the Nikkei has helped to spur a bit more confidence this afternoon on the market, and we're now trading well off our lows and looking to rally into the close," she said.
"The US Futures have gone substantially positive as well, which is helping, probably kicked along from a better performance from Asian markets this afternoon."
On the local market, overall, defensive stocks fared well, Ms Spencer said.
The banking sector lifted off its morning lows to close mixed.
National Australia Bank was down $1.02, or 4.26 per cent, to $22.90, Commonwealth Bank of Australia lost 64 cents, or 1.6 per cent, to $39.38, and ANZ Banking Group eased seven cents to $16.93.
Takeover target St George Bank advanced 43 cents to $26.82, ahead of its 2008 full year result tomorrow.
Westpac Banking Corporation put on 51 cents, or 2.55 per cent, to $20.50. Westpac reports its full year 2008 results on Thursday.
On Wall Street, the Dow Jones Industrial Average dropped 203.18 points, or 2.42 per cent, to close at 8,175.77 after being up as much as 200 points during the day.
"The banks saw a turnaround from a pretty poor performance this morning to a very strong close in the afternoon," Ms Spencer said.
Suncorp Metway Ltd fell 45 cents, or 5.66 per cent, to $7.50. The group told shareholders today at its annual meeting that it was on track to achieve its fiscal 2009 guidance for its banking and insurance arms after making a strong start to the financial year.
Major insurers lost ground, with QBE Insurance slumping 64 cents, or 2.55 per cent, to $24.45 and Insurance Australia Group eased seven cents to $3.50.
Retailers put in a mixed performance, with Woolworths gaining 10 cents to $26.15, David Jones slipping one cent to $2.69, and The Reject Shop plunging 70 cents, or seven per cent, to $9.30.
Global surfwear maker Billabong closed 68 cents, or 6.21 per cent higher, at $11.63 after upgrading its earnings guidance because of the falling Australian dollar, Ms Spencer said.
Australia's major miners made strong gains, with BHP Billiton adding 76 cents, or 3.09 per cent, to $25.36, and Rio Tinto up $3.60, or 5.57 per cent, to $68.25.
Local oil companies were mixed, with Oil Search adding 25 cents to $3.40, Santos down 10 cents to $11.65 and Woodside Petroleum firming 20 cents to $37.10.
Global recession worries sent oil prices plunging to 17-month lows overnight, leading to a 93 cent fall by New York's main contract, light, sweet crude for December delivery to US$63.22 a barrel.
At 1642 AEDT spot gold was trading at US$742.00 an ounce, up US$15.35 on yesterday's close of US$726.65.
Gold miners were mixed, with Lihir Gold leaping 8.5 cents, or 5.41 per cent, to $1.655 and Newcrest Mining lost 19 cents to $17.71.
Media stocks fell into negative territory. Seven Network lost 27 cents, or 4.96 per cent, to $5.17, while News Corporation was off five cents to $13.20.
News non-voting scrip dropped 15 cents to $13.00.
Queensland Gas was the top traded stock, with more than 650 million shares changing hands after BG Group announced a $4.88 billion takeover bid.
Shares in Queensland Gas finished $2.55, or 79.69 per cent, stronger at $5.75.
Preliminary national turnover reached 1.43 billion shares worth $4.37 billion, with 306 stocks rising, 755 stocks falling and 270 unchanged.
- AAP
