Australia Markets closed

Aust shares close flat at year high

Australian stocks have finished the day at their highest levels for the year after a flat session influenced by good news out of China and bad news out of the US.

At the close on Friday, the benchmark S&P/ASX200 index was 0.3 points, or 0.01 per cent higher at 4,583.1, while the broader All Ordinaries index was up 2.2 points, or 0.04 per cent, at 4,595.1.

On the ASX 24, the December share price index futures contract was nine points lower at 4,581, with 26,871 contracts traded.

The local market opened up about 0.3 per cent as investors looked past a weak lead from Wall Street before giving up those gains during the morning.

Wall Street closed lower providing a negative lead, with stalled negotiations in the US to avoid the so-called "fiscal cliff" raising the anxiety of investors.

The "fiscal cliff" refers to a series of tax hikes and spending cuts that will come into effect on January 1 if an agreement cannot be reached.

That was offset by a strong reading for China's HSBC flash manufacturing PMI reading, which rose for the second month in a row after 13 flat or declining months.

The Chinese number had given the Australian market a bit of a kick, said IG Markets market strategist Stan Shamu, although it gave up some of its gains from morning trade.

"China remains in expansionary territory so there are strong signs of China stabilisation and I think the market is fairly happy with that situation at the moment," he told AAP.

Weakening economic growth in China has weighed on ASX investors in 2012, particularly affecting companies most exposed to the Asian giant such as resources stocks.

Those stocks made gains on Friday with materials equities up 0.4 per cent.

BHP Billiton finished seven cents higher at $36.07, Rio Tinto lifted by 25 cents to $63 and Fortescue Metals climbed six cents, or 1.4 per cent, to close at $4.31.

Making news on Friday, newspaper publisher APN News & Media's shares were hammered after analysts downgraded the stock in response to a profit warning, with its publishing revenue having dropped 10 per cent since June.

In percentage terms, APN was the worst-performing stock on the S&P/ASX200, closing five cents, or 15.87 per cent, lower at 26.5 cents.

Making news on Friday, Caltex Australia flagged a return to profitability in calendar 2012 thanks to stronger sales of its fuel products and better refining margins.

Caltex was up 27 cents, or 1.43 per cent, at $19.20.

Insurance Australia Group said it would sell its ailing UK assets and expected to make a $240 million loss on the transaction.

IAG was down nine cents, or 1.87 per cent, at $4.72, although analysts regarded the move as necessary short-term pain that would be a positive in the long run.

In banking news, ANZ followed its rivals and cut its variable home loan interest rates by 20 basis points, which is less than the central bank's recent 25 point rate cut.

ANZ ended three cents lower at $24.65, CBA finished up 38 cents at $61.66, Westpac gained one cent to $25.99 and NAB closed flat at to $24.60.

The spot price of gold in Sydney finished at $US1,697.15 per fine ounce, down US95 cents from Thursday's local close of $US1,698.10 per ounce.

National turnover was 1.36 billion securities worth $3.1 billion, with 449 stocks trading up, 447 down and 361 unchanged.