Aust stocks close flat

Local market little changed but traders move out of financials and into materials.

The Australian stock market closed flat today after United States earnings reports failed to inspire and traders moved out of financial names and into materials after a key investment bank upgraded the sector.

At the 1615 AEDT official market close, the benchmark index S&P/ASX200 index inched down 0.06% to 5,305.9 points, while the broader All Ordinaries index also edged down 0.06% to 5,316.4 points.

IG market analyst Chris Weston noted the effect of Citigroup's decision to raise EMEA mining to bullish for the first time in three years, reflecting better bottom-up fundamentals, and to single out BHP Billiton Ltd and Rio Tinto Ltd as key picks.

"Fund managers have rotated out of financial into material names, helped largely by Citigroup upgrading the mining sector to a more attractive stance," Mr Weston said.

"Certainly Rio Tinto’s numbers have impressed enough to warrant a better feel good factor in the space and perhaps there will be sustained gains through 2014, rather than just a sector that is played by traders for short-term moves.

"Perhaps there is an investment case there to be made, but the fact that Citigroup has upgraded the mining sector for the first time in three years has been discussed on the desk."

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