Aussie stocks marginally weaker

PERTH - The Australian share market finished in the red after bank stocks lost ground in a directionless trading session ahead of the Reserve Bank's interest rate decision on Tuesday.

The benchmark S&P/ASX200 index was down 15 points, or 0.33 per cent, at 4586.7 points, while the broader All Ordinaries index shed 13.8 points, or 0.3 per cent, to 4592.3 points.

On the Sydney Futures Exchange at 1617 AEDT, the December share price index contract was 34 points lower at 4575 points on a volume of 15,346 contracts.

Hartleys head of research Trent Barnett said the local bourse had dipped in and out of negative territory on Monday on light trading volumes while NSW, ACT and South Australia enjoyed the Labour Day public holiday.

Profit-takers were outweighing buyers, Mr Barnett said.

"Some stocks are pretty cheap, but there is bumpy US data coming out," he said.

"Investors know they should buy, but the market keeps drifting down."

Mining giant BHP Billiton was up 12 cents at $36.32 while Rio Tinto had retreated 34 cents to $56.85.

The big four banks were weaker. ANZ gave up 51 cents, or 2.16 per cent, to $23.10, National Australia Bank had retreated 65 cents, or 2.18 per cent, to $29.20, Westpac slid 43 cents to $24.67 and Commonwealth Bank dropped 32 cents to $49.68.

Expectations are increasing that the Reserve Bank of Australia will lift the cash rate on Tuesday when its board meets, after several leading economics commentators wrote that the central bank was poised to pull the rates trigger.

Iron ore explorer Flinders Mines says it is in early stage talks with Rio Tinto about potential mine gates sales from its Pilbara project in a remote and rugged part of Western Australia.

Shares in Flinders were up half a cent at 13.5 cents.

Grains marketer AWB says an appeal against a court ruling in its favour in the United States in relation to the Iraqi wheat kickbacks scandal has been dismissed.

Shares in AWB fell 2.5 cents to $1.245.

The $2.2 billion takeover of China-focused Sino Gold Mining by Canada's Eldorado Gold Corporation is a step closer to consummation after Australian regulators approved the proposed tie-up.

Sino Gold shares were 11 cents stronger at $6.66.

Other gold mining stocks were mixed. Lihir was up four cents at $2.89, Newcrest surged 55 cents to $32.17 and Newmont was down seven cents to $4.86.

At 1623 AEDT, the spot price of gold in Sydney was US$1004.40 per fine ounce, up US$4.63 on Friday's closing price of US$999.77.

Energy stocks were mixed. Santos added 16 cents to $14.94, Woodside Petroleum weakened nine cents to $51.33 and Oil Search had dipped nine cents to $6.21.

Among retail stocks, Woolworths was up 17 cents to $29.08, Coles owner Wesfarmers rose four cents to $25.55, David Jones advanced seven cents to $5.84, Harvey Norman eased 14 cents to $4.24 and JB Hi-Fi lost 47 cents to $18.86.

The most traded stock by volume was DataDot Technology with 152.51 million shares worth $14.07 million changing hands.

Its shares had gained 1.3 cents, or 18.06 per cent, to 8.5 cents.

Preliminary market turnover was 1.59 billion shares worth $2.19 billion, with 459 stocks up, 572 down and 318 steady.

- AAP