Australian stocks gave up early gains to end 0.14 percent lower on Monday as falls in banks and retailers offset gains in miners. Banks fell after approvals to build new homes fell 7.8 percent in February to their lowest in almost three years and retailers lost ground as investors became increasingly convinced that the central bank will hold rather than cut rates on Tuesday.
Miners bucked the downward trend, buoyed by a survey showing a pick-up in production at large factories in China, which eased some worries about demand from Australia's biggest customer. China's big factories were surprisingly busy in March as a stream of new orders lifted activity to an 11-month high, but credit-constrained smaller manufacturers struggled, suggesting that the pace of economic growth is still losing steam.
BHP Billiton and Rio Tinto both climbed more than 1 percent, while top banks fell. Australia and New Zealand Banking Group, the fourth biggest lender as ranked by assets, led the downward move with a 0.9 percent fall. The S&P/ASX 200, which rose as much as 1 percent in morning trade, was 5.9 points lower at 4,329.30, according to latest available data. The market closed steady on Friday but rose 6.9 percent for the quarter, its biggest quarterly gain in 2-1/2 years. Most retailers fell as expectations diminished for a rate cut that could promote spending. Top department store Myer was among leading sector losers, falling 3 percent to A$2.27. New Zealand's benchmark NZX 50 index fell 15.93 points to 3,493.6 points.
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