Concerns over Europe's woes trim early gains

The local market retreated from early gains amid growing concerns that Greece and Portugal may need additional bailout funds. Negotiations between Greece and its creditors kept investors nervous, trimming positive momentum. At the close the S&P/ASX 200 was essentially flat (down 0.9 points at 4,224.2) and the All Ordinaries fell slightly (down 1.2 points at 4,286.4).

Greece’s negotiations with creditors have kept investors cautious. IG Markets strategist Stan Shamu noted that even a small chance the Greek outcome differs from expectations could trigger a swift retreat in risk assets after recent gains — a key reason markets traded cautiously.

Resource stocks eased (down about 0.3%), healthcare fell (around 1.2%), and technology lost roughly 0.8%, marking a second consecutive day of declines for tech. Retailers also eased ahead of the earnings season, while energy stocks rose on higher oil prices. Materials closed lower led by weakness in major miners.

Energy shares rose after the European Union imposed an embargo on Iranian oil exports, which sent oil prices surging to nearly US$100 a barrel. Higher oil prices lifted energy-focused companies and improved revenue outlooks for some producers.

Surfwear retailer Billabong was the largest loser in the consumer discretionary sector, falling 6.1% to $1.865. The stock had gained sharply the previous session on rumours it could be a target for a private equity buyout, and today’s move reflects volatility around takeover speculation.

AWE’s shares rose about 3% to $1.485 after the energy explorer said it may sell roughly 50% of an oil project in Indonesia. The company said proceeds would help fund a US$600 million expansion across Australia, New Zealand and parts of Asia — a clear capital-raising and growth strategy that investors reacted positively to.

Newcrest rose to $32.84 after its production results met market expectations. BHP Billiton weighed on materials, falling to $37.08. Oil Search jumped — rising about 18% to $6.84 — after reporting a 26% rise in revenue for the year to December 31 (US$732.9 million), benefitting from higher oil prices.

Volumes were light across Asia because of the Lunar New Year holiday. Turnover totaled 1.63 billion shares worth $3.27 billion, below the average turnover of around $3.8 billion. Investors should note that lower holiday volumes can affect how easily large trades are executed and how price moves behave during the session.