Investors once again showed a lack of conviction after early buying in the big banks waned through the session, although markets appeared comfortable with election results in Germany and New Zealand.
The benchmark S&P/ASX 200 index ended Monday's session up a bare 2 points at 5684, leaving it languishing around the bottom of an around 100-point trading range that has now held since May.
Selling in banking heavyweight CBA weighed heavily on the bourse, as the stock fell 1.1 per cent after Goldman Sachs analysts cut their 12-month price target on the stock by 13 per cent to $77.77 over the weekend, citing higher risks around the AUSTRAC's case against the bank. CBA shares closed on Monday at $75.81.
The other major lenders remained a source of support for the ASX, with Westpac up 0.7 per cent, ANZ up 0.2 per cent, while NAB was flat. The big four banks' move over the weekend to remove ATM fees was expected to have an "immaterial" impact on their profitability, Morgan Stanley analysts said Monday.
The ATM news came ahead of main domestic rivals calling for an overhaul of the prudential regulator's caps on property investor and interest-only mortgages, after claiming the curbs are stifling competition.
Suncorp ended the session up 0.5 per cent, while Bank of Queensland added 0.9 per cent.
The ASX appeared to shrug off the weekend's political events, with elections in Germany and New Zealand producing uncertain results which nonetheless were not unexpected by pundits and polling.
Premier Investments was another drag on the market, ending the session down 2.6 per cent after the firm posted a 1.2 per cent rise in net profit to $105.1 million as soft fashion brand sales and a weaker British pound hit the retailer's 2017 result.
But US futures were lower on Monday as investors took on board a new travel policy from US president Donald Trump who proclaimed on Sunday: "I must act to protect the security and interests of the United States and its people."
Australian politicians were concerned with the country's gas industry on Monday, after the Turnbull government gave the east coast gas giants one last chance to free up enough fuel for the domestic market or be hit with export controls.
Santos shares ended up 1 per cent while Origin Energy eased 0.1 per cent.
Lithium plays were weak, with Orocobre down 4.3 per cent and Galaxy Resources down 4 per cent, continuing to underperform their global peers.
Stockwatch
TPG Telecom
TPG shares slipped 1.2 per cent on Monday to $5, with analysts questioning whether its billionaire founder David Teoh can pull off the company's transformation. JP Morgan analyst Eric Pan, who has an 'underweight' recommendation on the stock, emphasised that it won't be an easy road. "While we agree that the potential opportunity ahead of the company is tremendous, we continue to worry about significant margin compression in the near-term due to the NBN migration and mobile-related [operating expenditure] before the ventures get to breakeven," Mr Pan said in a note to clients. Mr Pan believes that further acquisitions could boost earnings growth and lift investor sentiment: "As the company faces margin pressure from the NBN migration and earnings growth slows, it's possible that management could help boost earnings growth by making further accretive acquisitions in the space."
Movers
New Zealand Dollar
The kiwi lost ground on Monday, falling 0.8 per cent against its US counterpart to fetch US72.8?? after election results showed the incumbent National Party won 58 seats in the 120-seat House of Representatives, while the main opposition Labour Party secured 45. The inconclusive election outcome left investors uncertain of a governing coalition. The formation of a government will depend on either party striking a coalition deal with the smaller New Zealand First Party, and talks may drag on for weeks. Prime Minister Bill English has claimed a mandate to form the next government.
Hongky developers
Chinese property stocks plunged in Hong Kong on Monday after mainland Chinese cities added housing curbs, dashing speculation that the authorities would pull back on measures to cool rising prices. Eight cities including Chongqing and Nanning rolled out restrictions over the weekend, with most banning home resales within two to three years of purchase, the official Xinhua News Agency reported. Shanghai-based Tospur Real Estate Consulting said six more cities may follow suit, without naming them.
No rate hikes here
Westpac's veteran chief economist Bill Evans appears unmoved by all the recent rate-hike talk. In a somewhat surprising development, markets are pricing in just shy of two moves by the end of next year, and three 0.25 percentage moves by the end of 2019. "Recall that in mid-August last year, these same players (markets and most other banks) were forecasting rate cuts over the course of the remainder of 2016 and 2017," the economists says. "Westpac's view at that time was 'rates on hold' in 2016 and 2017." Evans's view remains the next move higher will only come in mid-2019.
Iron bear
Iron ore slumped into a bear market after posting the biggest weekly loss in 16 months amid. Weighing on the commodity is mounting concern that record demand in China may ease off as mills enact winter
output cuts just as data from the top user signals that the economy may be cooling.
Spot ore sank 3.8 per cent to $US63.56 a tonne on Friday evening taking the week's
retreat to 12 per cent. Prices have lost more than 20 per cent since peaking near $US80 in August, meeting the common definition of a bear market. Chinese futures trading during Monday's session suggested more falls in store when the spot price was set that evening.
