Aust stocks close flat

Local market recovers early losses after reports Janet Yellen will chair US Fed.

The Australian stock market closed flat, reversing earlier losses after reports United States President Barack Obama is set to announce a dovish candidate as the new Federal Reserve boss.

At the 1615 AEST official market close, the benchmark ASX 200 index inched up 0.07% to 5,153 points, while the broader All Ordinaries index edged up 0.07% to 5,151.6 points.

A White House official said the president will announce he is nominating Federal Reserve Vice Chairwoman as the new leader of the central bank, with current chair Ben Bernanke set to leave after his term ends in January. 

IG analyst Stan Shamu said the reports had caused some volatility in markets.

"The probability of tapering in the December meeting is falling by the day, and at present I say it is around one in three," Mr Shamu said.