Australian shares were steady on Monday, as gains in materials stocks on strong commodity prices were offset by declines in the financial sector. The S&P/ASX 200 index rose 0.01 percent or 0.344 points to 5990.1 by 0104 GMT. The benchmark rose 0.3 percent on Friday.
Materials stocks led the gains on the benchmark with the mining index gaining more than 1 percent when Shanghai steel futures traded near their strongest level since mid-September, along with lead and zinc touching multi-week highs amid supply concerns. Mining giants BHP and Rio Tinto climbed 1.7 percent and 1.4 percent, respectively.
Rio Tinto, after months of speculation, appointed Simon Thompson as its next chairman to succeed Jan Du Plessis. Thompson, who is currently chairman of Rio's remuneration committe, take over the chairmanship on March 5 next year.
The financial index was down 0.6 percent with the 'Big Four' banks sliding between 0.5 percent and 1.1 percent. "The banks are still reacting to the news from last week. So they are likely to underperform. And I would say given the uncertainty, the banking enquiry is going to yield," said Ben Le Brun, an analyst at Charles Schwab Australia.
The Australian government last week said it will hold a wide-ranging inquiry into a scandal-hit finance sector, arguing one was needed to restore public confidence as it reversed its long-held opposition amid mounting political pressure. Deutche Bank in a research note said they expect the Royal Commission to be disruptive for the banks, and a distraction for management. The financial services company also said the inquiry could impose new constraints on the banks' operations.
In other sectors,the energy index gained 0.7 percent as Brent crude rose as high as $64.32 a barrel, a day after Opec and other crude producers agreed to extend output cuts until the end of 2018 to tighten global supplies and support prices. Oil and gas company Woodside Petroleum gained 0.5 percent while Origin Energy climbed 0.7 percent.
Meanwhile, child care centre operator G8 Education was the biggest loser on the benchmark, falling more than 20 percent, after the company reduced its profit forecast from the previous quarter stating it expects market conditions to remain challenging for the next 6-9 months. In New Zealand, the benchmark S&P/NZX 50 index fell 0.1 percent or 7.4 points to 8181.43, after gaining for three consecutive sessions.
The consumer sector was the biggest drag on the index with milk companies a2 Milk falling 2 percent and Synlait Milk shedding 2.2 percent. Healthcare and real estate stocks also weighed on the index with Ryman Healthcare and Kiwi Property Group falling 2 percent and 2.6 percent, respectively. Utilities sector helped recoup losses on the benchmark with electricity supplier Contact Energy climbing 0.6 percent.
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