Key index down slightly after a jittery day

THE sharemarket finished a choppy session slightly lower yesterday, partly recovering from a four-month low hit earlier in the day but unable to fully overcome weakness in the banks.

THE sharemarket finished a choppy session slightly lower yesterday, partly recovering from a four-month low hit earlier in the day but unable to fully overcome weakness in the banks.

The S&P/ASX 200 index closed 8.1 points lower at 4157.4, its third straight losing day.

Among the main sectors, materials rose 0.8 per cent and energy gained 0.4 per cent but financials dropped 0.7 per cent.

Investors remained cautious after the European Central Bank said it had stopped providing liquidity to some Greek banks.

"The heightened threat of Greece is still a thorn in the side of traders," said CMC Markets' Ben Taylor. "There will be a point when value presents itself in this market. However, I believe there is more downside risk to be played out."

City Index analyst Peter Esho said the market had

not performed too badly and Asian markets were trading in positive territory. "There's been a bit of a shift towards optimism. We've seen some steep losses recently, and maybe there's a case for things to bounce a little bit."

Mr Esho said investors still had Greece on their minds but at least that country was headed towards elections.

Rebalancing of Australian portfolios saw banks and property stocks sold for an increased exposure back into the mining sector.

BHP Billiton was up 28? at $32.77 as the miner turned its back on a silver, lead and zinc joint-venture project in north Queensland. Rio Tinto advanced 17? to $58.16.

Coalworks was steady at $1.02 as it stepped up its calls for shareholders to reject a $142 million takeover offer as well as a separate attempt to dump its chairman and chief executive.

Among the big banks, Commonwealth Bank lost 75?, or 1.5 per cent, to $51.02 after it announced a third-quarter cash profit of

$1.75 billion, from

$1.7 billion for the previous corresponding period. Westpac sagged 46? (2.1 per cent), to $21.22, ANZ dipped 4? to $21.57 and NAB retreated 5? to $24.35.

Insurance Australia Group firmed 4? to $3.38 after it said it would review its business in the UK for a possible sale.

Leighton rose 13? to $18.05. The company has appointed an external consultant to review its disclosure procedures after breaching laws this year.

European markets were down last night. Several hours into the session, London's FTSE 100 had fallen 0.6 per cent, Frankfurt

0.4 per cent and Paris 0.5 per cent.

The dollar recovered a little from the five-month low struck on Wednesday, finishing in Australian trading at US99.47?.