Aussie stocks: Market shrugs off negative sentiment

The Australian sharemarket shrugged off negative sentiment in early trading today, to close slightly higher as the big banks made up for softness in the resources sector.

At the 1615 AEST close, the benchmark S&P/ASX200 index had risen 9.8 points, or 0.2 per cent, to 4861.9 points, while the broader All Ordinaries index had gained 6.1 points, or 0.12 per cent, to 4945.4 points.

On the ASX 24, the June share price index futures contract was 10 points higher at 4873 points, with 28,181 contracts traded, according to preliminary figures.

CMC Markets chief market analyst Ric Spooner said many traders had expected that China's tightening of bank reserve ratios over the weekend could generate negative sentiment for the resources sector on Monday.

But policy tightening in China appears to have been already factored into most analysts' forecasts.

Although the big miners finished weaker, they had improved from earlier lows today.

"They (resources stocks) aren't exactly robust compared to Friday, but they are considerably better than where they were this morning," Mr Spooner said.

"There is some concern about where China is going to go over the next 18 months to two years."

Mr Spooner said investors rotated into the big banks on Monday.

The local market needed some positive news to gain impetus and it was likely to come from the company reporting season in the United States over the next few days.

In the resources sector, BHP Billiton was off four cents at $47.49, and Rio Tinto dipped 15 cents to $84.00.

Among the major banks, the National Australia Bank was up 10 cents at $26.29, Westpac added 15 cents to $24.95, the Commonwealth Bank found 31 cents at $52.53, and ANZ lifted 12 cents at $23.73.

Retailer Woolworths advanced 19 cents at $26.72 after it reported a five per cent lift in third-quarter sales and reaffirmed its full year earnings guidance.

Property developer Leighton Holdings was down 25 cents at $24.63 after its Middle Eastern subsidiary, Al Habtoor Leighton, said it may need a cash injection from its parent firm if ongoing legacy projects are not paid on time.

Maintenance and project management firm Transfield Services improved four cents to $3.49 as it and its joint-venture partner WorleyParsons won a $65 million contract with oil and gas producer Woodside Petroleum.

WorleyParsons lifted 63 cents to $31.60.

Financial services provider Challenger firmed two cents to $4.86 after it upgraded its full year 2011 retail life annuities sales target by 28.5 per cent to $1.8 billion.

At 1639 AEST, national turnover was 2.2 billion shares worth $4.7 billion, with 503 stocks trading up, 597 down and 430 unchanged.

- AAP