Banks keep bourse in the black as investors look for leads

The Australian sharemarket closed higher as investors bought banking stocks in the absence of local drivers.

At the close on Monday, the benchmark S&P/ASX200 Index was 12 points, or 0.23 per cent, higher at 5135.4, while the broader All Ordinaries was up 11.9 points, or 0.23 per cent, at 5127.1.

RBS Morgans client adviser Alistair McCorquodale said the market was in a holding pattern before the release of Woolworths' results on Wednesday.

"It's really the banks that have kept us in positive territory," Mr McCorquodale said.

"The miners have been pretty flat and there's not a lot really driving our market."

Financial stocks continue to be well-supported amid expectations the US Federal Reserve could start to taper economic stimulus later in the year.

China said growth in the world's second-largest economy is showing signs of stabilising after a lengthy decline.

National Australia Bank rose 9¢ to $32.55, Commonwealth Bank rose 53¢ to $72.58, Westpac rose 21¢ to $31.68 and ANZ rose 18¢ to $29.82.

BHP Billiton fell 6¢ to $35.58, while Rio Tinto fell 12¢ to $59.81. A jump in the spot price of gold bolstered Newcrest, its shares rising 64¢, or 4.9 per cent, to $13.70.

Drilling company Boart Longyear fell 6.5¢, or 11.7 per cent, to 49¢, after it said it made a half-year net loss of $329 million as it deals with a mining investment downturn.

Caltex fell 2¢ to $18.93 after it reported a 13 per cent drop in first-half profit, due to a weakening Australian dollar and a pipeline outage.

Health insurer nib fell 1¢ to $2.12 after it reported a slight dip in net profit because of costs associated with the acquisition of a New Zealand insurance company.

The Australian dollar rose to US90.4¢, from US90.2¢.

Bond futures prices made slight gains as investors prepare for the release of capital expenditure data on Thursday. Nomura's head of macro products, Jon Linton, said investors were waiting for the capex data, although stimulus tapering by the Fed remained the major influence on the market.

"Capex is going to set the tone domestically, given it's going to tell us about the state of the mining sector and investment," he said.

"The expectation is that the Fed is going to taper in September and that's caused the heaviness in the bond market."

The September 10-year bond futures contract was trading at 95.980 (implying a yield of 4.02 per cent), up from 95.945 (4.055 per cent) on Friday. The three-year contract was at 97.160 (2.840 per cent), up from 97.150 (2.850 per cent).