KEY POINTS:
PERTH - The Australian share market closed marginally in the red today on thin trading volumes.
Traders said the terms of the proposed $19 billion Westpac and St George Bank merger dominated headlines rather than any consideration about the federal budget.
The benchmark S&P/ASX200 index down 15.8 points, or 0.27 per cent, to 5,812.7 while the broader All Ordinaries fell 10.9 points, or 0.18 per cent, to 5,883.2.
On the Sydney Futures exchange at 1617 AEST, the June share price index futures contract was up 14 points to 5,831 on a volume of 23,189 contracts.
MF Global senior trader Anthony Anderson said today's trading was a "bit of a non event" with low volumes of shares changing hands.
Mr Anderson said the St George/Westpac merger proposal surprised the market as it came out of the blue.
"Westpac has been a little bit weaker, as often the aggressor is, and St George has done remarkably well," he said.
"There was good profit-taking in St George today.
"And the rest of banking sector was reasonably weak, with NAB (National Australia Bank) the standout as it has been - other than St George - for the past week or so."
Westpac closed 86 cents, or 3.31 per cent, weaker at $25.11, St George finished up $6.72, or 25.22 per cent, at $33.37 after the trading halts on the two banks were lifted today.
NAB rose 25 cents to $34.38, ANZ was down 57 cents at $23.13 and Commonwealth Bank was down 51 cents to $45.35.
"The miners are all a little bit weak all day with exception of Fortescue as its starts its shipments of iron ore to China," Mr Anderson said.
"Local markets are a bit sceptical on Twiggy (Fortescue chairman Andrew Forrest) but the offshore people love the story and that's where the buying continues to come from."
Following an easing in the crude oil price and fall in the gold price overnight, resources stocks were largely lower.
Diversified miner BHP Billiton was $1.07, or 2.28 per cent, weaker at $45.78 and its takeover target Rio Tinto was down $2.26, or 1.54 per cent, at $144.50.
BHP Billiton today said it expected slightly better than 10 per cent growth in oil productiion this year, but global oil supply was set to stay tight in the neart term.
The oil and gas producers were mixed. Woodside Petroleum was $2.24 stronger at $61.33, Santos was 14 cents weaker at $17.76 and Oil Search was nine cents lower at $5.69.
Gold stocks were in the red. Newmont lost 12 cents to $4.78, Newcrest shed 64 cents to $30.21 and Lihir dipped nine cents to $2.96.
The price of gold in Sydney at 1624 AEST was US$878.25 per fine ounce, down US$5.15 on yesterday's close of $883.40.
Mr Anderson said the retail sector was perhaps enjoying some "pre-budget euphoria", with Fosters, Woolworths and Coles owner Wesfarmers performing well.
Wesfarmers was 52 cents higher at $38.64, Woolworths added 42 cents to $28.65 and brewer Foster's was five cents stronger at $5.05.
In the news today, Australia's largest electronics retailer, Harvey Norman Holdings, booked a lift in sales over the last four months, despite a softening retail market.
Its shares closed three cents higher at $3.62.
Media stocks were lower. News Corp dipped 14 cents to $20.47, its non-voting stock lost 14 cents to $19.57, Consolidated Media was down 12 cents to $3.68 and Fairfax slipped three cents to $3.42.
In other headlines today, New Zealand co-operative Fonterra is seeking regulatory clearance from the Australian Competition and Consumer Commission (ACCC) as it looks to make a bid to acquire dairy producer Dairy Farmers.
The top-traded stock by volume was energy storage firm Cougar Energy, with 42.02 million shares worth $5.12 million changing hands.
Cougar closed up three cents, or 31.58 per cent, at 12.5 cents.
Preliminary turnover was 1.61 billion shares worth $6.32 billion, with 598 stocks up, 607 down and 395 unchanged.
- AAP
