The local market finally had a rise on Monday after a week of losses, led by a recovery in the energy sector but weighed down in the afternoon by plunging Chinese sentiment.
Despite trading 1.4 per cent higher early in the day, with investors buoyed by a rebound in global commodity prices, the All Ordinaries finished only 0.21 per cent higher at 5290.10 while the ASX200 finished 0.19 per cent higher at 5309.10.
The Shanghai Composite dropped more than 6 per cent after China's securities regulator cracked down on margin accounts to curb excessive speculation. Shares in Citic Securities and Haitong Securities were aggressively sold off after regulators suspended the companies from margin activities.
"China's off 6 per cent and that's the thing that really stands out," said Morgans senior client advisor Alistair McCorquodale. "That would translate back on to our market in preparation that the US and Europe tonight will be a little weaker on the back of that.
"We had good leads coming out of the overseas markets on Friday night. We were looking for a stronger day than ultimately what occurred."
Shares in OzForex crashed 10.33 per cent after the international payments and foreign exchange services business said that Westpac would no longer be providing it banking service. The sell-off seems to have been inspired by trigger the failure of forex broking firms following the shock abandonment of the Swiss franc's peg against the euro.
Medibank Private was up 2.16 per cent to $2.36 as "buy" recommendations continue to flow for the stock. Bell Potter slapped a 12-month price target of $2.63 on the shares, citing Medibank's dominant market position, earnings transparency and potential for earnings growth - despite operating in a highly regulated and competitive market. Medibank's shares are up 16 per cent since listing in late November.
Macquarie Group was up 5.35 per cent to $58.25 after a profit upgrade, with the bank expecting its full-year profit to surge by between 10 and 20 per cent due to improved trading conditions and the lower Australian dollar.
Shares in Oil Search lifted 4.90 per cent to $7.49 after expansion of the giant PNG LNG project in Papua New Guinea took a step closer to reality. ExxonMobil and Oil Search have made a deal with the local government that would see a final investment decision on a third LNG processing train taken "as soon as possible" .
Other energy stocks also had a good day with improved global sentiment on the oil price. Santos was up 0.67 per cent to $7.54, Horizon Oil shot up 4 per cent to 13 cents, and Senex lifted 1.79 per cent to 28.5 cents.
Rio Tinto rose 0.50 per cent to $54.16 after rumours the mining giant will reveal on Tuesday that it has sold more stockpiled iron ore than expected. This will bolster its balance sheet ahead of a highly anticipated round of cash returns next month. Fellow mining giant BHP rose 2.44 per cent to $27.71.
Ten Network stayed put at 20.5 cents amid news that the troubled broadcaster and its advisor, Citi, will resume negotiations with bidders this week. Discovery Communications and Foxtel are in pole position with a 23¢ a share joint offer.
Trading in troubled education services provider Vocation was halted ahead of an earnings update. Shares are set to return to trading on Wednesday morning at the earliest.
In an ASX statement just before the market opened, the company said the trading halt was also "to complete certain financial reviews which are currently in progress".
Vocation shares fell 9 per cent on Friday to 25 cents.
