Australian shares end flat as miners counter energy, consumer losses

Australian shares closed flat on Monday, with gains in iron ore miners countering losses in consumer discretionary and energy stocks in the market’s thinnest trading session in more than a year.

The S&P/ASX 200 index finished 0.8 points higher at 8,728.60, with volumes barely 0.7 times the 30-day average of 652 million shares.

While the Australian market started the first full trading week of the year on a subdued note, equities across Asia soared, largely driven by artificial intelligence-related optimism, brushing aside concerns over the political upheaval in Venezuela.

MSCI’s broadest index of Asia-Pacific shares leapt 1.7% to a record high.

Japan’s Nikkei 225 jumped 2.8% to a near record high, while stocks in South Korea and Taiwan surged over 3% to fresh peaks.

Australian shares failed to match that momentum, continuing a trend from last year, when the local market gained about 7%, but still lagged major global peers such as Japan and Hong Kong.

“Markets are still in holiday mood,” said Craig Sidney, senior investment adviser at Shaw and Partners.

Volumes are expected to remain low this week, with activity only picking up towards the latter part of January, Sidney said.

Miners climbed 1.8% to notch a record close, as iron ore prices rose on strong Chinese demand and supply constraints.

BHP and Fortescue advanced 1.6% each, while Rio Tinto climbed to a record high. Gold stocks leapt 1.5% in their best session in two weeks on surging bullion prices.

Energy stocks snapped a three-session winning run as investors weighed whether OPEC member Venezuela’s political turmoil would disrupt shipments in a well-supplied market.

Woodside and Santos slipped 1.2% and 1.1%, respectively, reversing earlier gains.

Interest rate-sensitive sectors such as financials, consumer discretionary, and real estate lost between 0.2% and 1.6%.

With expectations that rates aren’t going down soon and the next move likely being up, pressure on such stocks is set to persist in the medium term, Sidney said.

New Zealand’s benchmark S&P/NZX 50 index inched 0.3% higher to 13,587.23.