The Australian sharemarket has ended marginally lower after a strong rebound brought it back from a 1 per cent drop at the open.
Traders had shied away from risk in morning deals as US President Donald Trump’s agenda crashed into another major hurdle over the weekend.
The return back toward the flatline was driven by strong buying in the big banks as well as the mystery purchase of around 10 per cent of Myer stock, raising the spectre of a possible takeover bid for the department store giant.
At the close, the benchmark S&P/ASX 200 index inched down 6.8 points, or 0.12 per cent, to 5,746.7, while the broader All Ordinaries index dipped 6.9 points, or 0.12 per cent, to 5,789.2.
“It was a case of sell first and ask questions later for our market this morning,” Gary Huxtable, client adviser at Atlantic Pacific Securities, said.
“But some buyers emerged at the 5,700 level and momentum slowly gathered throughout the session.”
Markets are seen at risk of falls as the failure of Mr Trump’s Republican Party to pass legislation repealing Obamacare highlights the threat his tax cuts and a boost to infrastructure spend could falter.
“After a 15 per cent post-election rally US stocks are vulnerable to any political shocks,” he said.
“The failure of the Obamacare repeal is not economically significant, but a hostile parliament threatens the positive outlook.
“Improvements in the US economy and earnings outlook are drivers, but optimism about legislative changes is also a factor in the gains.”
Locally, traders have a light week of data and company news to assess, with the focus largely to remain on offshore markets for a guide to the direction of the ASX 200.
However, the market was abuzz with M&A talk late on Monday afternoon as a block trade worth over $90 million saw a mystery buyer claim a 10 per cent stake in the retailer.
Rumours have pointed to retail magnate Solomon Lew as a potential buyer, but nothing has been confirmed.
Still, investors were happy to push the group’s shares up 18.3 per cent to $1.26, it’s biggest daily gain on record.
Also performing well were the big banks after a red start to the session, with a solid end in the black.
The gains were led by a 0.4 per cent gain at NAB.
In contrast, the big miners were under the heaviest pressure after iron ore prices slid on Friday night.
BHP Billiton tumbled 2.9 per cent to $23.55, while Fortescue slumped 3 per cent to $6.07 and Rio Tinto gave back 1.8 per cent to $59.02.
In energy, Santos jumped 1.3 per cent to $3.76, while Woodside advanced 0.7 per cent to $31.21.
Among blue chips, telco giant Telstra eased 0.4 per cent to $4.57, while national carrier Qantas won 0.8 per cent to $3.92.
Meanwhile, the Australian dollar ended local trade around US76.3c, steadying through the session after losing ground over the weekend.