Australian shares finished a choppy session flat on Tuesday with the broader market bolstered by a modest recovery among resource stocks, though Suncorp Group weighed on the index after a A$500 million writedown caused its shares to fall sharply. Suncorp lost 2 percent, its biggest one-day drop since February 24.
The S&P/ASX 200 index slipped 1.1 points to 5,511.7 at the close of trade. The benchmark rose 0.4 percent on Monday. New Zealand's benchmark NZX 50 index lost 0.2 percent or 7.8 points to finish the session at 5,145.9. Volumes were thinned by the absence of catalysts as markets in United States and Britain were shut for a holiday on Monday. The insurance sector was dragged lower as Suncorp Group flagged the writedowns, saying its growth targets had been reduced to between 4 percent and 6 percent for fiscal 2015.
Suncorp dropped 2.5 percent, while Insurance Australia Group Ltd was flat. Trading volumes were relatively small with 178 million shares changing hands compared to a daily moving average of 600.4 million shares so far in 2014. "We just don't have any catalysts," said Stan Shamu, market strategist at IG in Melbourne, highlighting the relatively quiet trade. There was some relief for miners after Chinese steel and iron ore futures rose to one-week highs overnight after a battering in recent weeks, although the outlook for demand remained shaky.
World no.4 iron ore miner Fortescue Metals Group Ltd climbed 1.3 percent. Blue-chip miners BHP Billiton Ltd slipped 0.1 percent while Rio Tinto Ltd added 0.4 percent. Shanghai copper climbed to its highest since late February as seasonally strong demand put pressure on tight supplies amid modest trading volumes given holidays in Britain and the United States. Australia's largest telecommunications provider Telstra Corporation Ltd fell for a second session, down 0.5 percent after hitting 9-year highs of A$5.40 earlier in May. Lynas Corporation Ltd soared more than 13 percent to 3-week highs of A$0.17.
"It's been sold off quite a lot and now what's happening is a lot of traders are trying to take advantage of the low price - trading off improvement in China and in India as well," said Shamu. "In China they're talking about stimulus - that would be a positive for rare earths in the short term." Ingenia Communities tumbled 10.2 percent to 6 week lows of A$0.47 after releasing its group update, saying revisions to the aged pension indexation base may have a slight impact on revenue growth. OzForex Group Ltd slid 12.8 percent after reporting its full year results that beat its prospectus forecasts, though it said active clients were behind budget.