Despite an early rally, the Australian sharemarket finished little changed after bullish sentiment fizzled out on concerns persistently higher oil prices would dampen global growth.
Shrugging off the strong overnight lead from Wall Street the S&P-ASX 200 index closed 0.6 points or 0.01 per cent up at 4643.40 points as Brent crude oil held steady at $US115 a barrel on fears of a prolonged supply disruption in Libya.
The broader All Ordinaries index was up 3.6 points, or 0.08 per cent, at 4737.3.
On Wall Street bullish sentiment over AT&T’s proposed takeover of T-Mobile swept aside lingering Japanese radiation concerns, high oil prices, the 9.6 per cent slump in US existing home sales and 5.2 per cent drop in house prices, with the S&P 500 index climbing 1.5 per cent on thin volume.
In Tokyo the Nikkei index was up 4 per cent at the Sydney close after the Bank of Japan injected another ¥1 trillion yen ($12.5 billion) into the banking system. The Shanghai composite index was up 0.2 per cent.
On the ASX banks led the market 0.7 per cent higher at the open before profit taking set in.
Resources stocks dragged the market lower, with oil and gas majors losing up to two per cent of their value, Ord Minnett private client adviser Jon Hancock said.
"(It’s) partly through the settling down of the nuclear issues in Japan,” he said.
"There was a fairly strong rally in those stocks based on the feeling Japan would lessen its nuclear capacity and change that across to coal or gas-fired power generation."
Santos slipped 32 cents, or 2.1 per cent, to $14.90, while Woodside Petroleum lost 55 cents, or 1.22 per cent, to $44.65 and Oil Search eased three cents to $6.95.
Trading volumes were still light and there was a “fear of the unknown” regarding the bombing of Libya which was still hanging over the market, Mr Hancock said.
"Is it a quick hit-and-run or is it a more prolonged outcome-less effort from the coalition?"
"That’s having an effect on oil prices and there is an expectation oil will skyrocket,” he said, adding oil was unlikely to reach the mid-2008 level of around $US150 per barrel.
Market heavyweights BHP Billiton and Rio Tinto also came under selling pressure, with BHP Billiton finishing down 30 cents, or 0.67 per cent, to $44.20. Rio Tinto fell 45 cents, or 0.56 per cent, to $80.55.
Reports from the UK overnight suggested Rio was planning a push into Russian diamond mining in a bid to cash-in on increased demand from China.
Major banks were mixed with Commonwealth Bank and Westpac gaining over 0.57 per cent, ANZ Banking Group steady and National Australia Bank off three cents to $24.69.
NAB said it had resolved a dispute with the Australian Taxation Office over an Exchangeable Capital Units capital raising without any admission of liability.
The spot price of gold in Sydney was trading at $US1429.3 per fine ounce, up $US2.28 from yesterday’s local close of $US1427.02.
Gold major Newcrest Mining firmed eight cents to $37.02.
Mr Hancock said News Corporation rallied partly on news offshore of AT&T’s proposed $US39 billion acquisition of T-Mobile USA.
The deal, which requires regulator approval, would create the biggest US wireless provider.
News Corporation shares jumped 23 cents, or 1.32 per cent, to $17.62 and its non-voting scrip gained 19 cents, or 1.16 per cent, to $16.60.
Telstra climbed two cents to $2.66 and rival Singapore Telecommunications - owner of Optus - gained two cents to $2.30.
Shares in BC Iron surged 10 cents, or four per cent, to $2.60 after the junior iron ore miner said it had applied to the Takeovers Panel in protest at suitor Regent Pacific abruptly walking away from its planned takeover.
In other news, pawn broker Cash Converters said it would sell majority ownership in the company as part of a strategic relationship to be formed with US based EZCORP. Its shares leapt 3.5 cents, or 4.22 per cent, to 86.5 cents.
National turnover was 2.8 billion securities worth $5.1 billion, with 680 stocks up, 475 down and 373 unchanged
On the ASX 24, the June share price index futures contract was down four points at 4660, with 31,055 contracts traded.