The sharemarket finished flat today after rebounding from intraday lows following news that the Labor Party would remain in government.

The benchmark S&P/ASX 200 index closed lower by 2.3 points, or 0.05 per cent, at 4573.2 points, while the broader All Ordinaries index fell 2.7 points (0.06 per cent) at 4613 points.

The bourse immediately dipped after two key independent MPs – whose votes were crucial to determining which party would form power – said they would back the Labor Party.

But both the All Ordinaries and S&P/ASX 200 rebounded shortly afterwards.

Austock Securities senior client adviser Michael Heffernan said the market was initially unhappy with the Independents’ decision but then backed the move.

“Watching the market as the revelations unfolded, as it progressed, the market dropped a bit at the start but then it picked up,” Mr Heffernan said.

“I think what the market is happy about is that there is going to be a lot more discussion in this parliament about various issues than there was in the past.

“When (Mr) Oakeshott was talking, there was a pretty clear indication that was going to take place, so we may not see anything like the peremptory mining tax implemented,” Mr Heffernan said.

Big miners both lost ground – BHP Billiton fell 11 cents to $38.44 and Rio Tinto lost 65c at $74.35.

Earlier in the afternoon, the Reserve Bank of Australia left the cash rate unchanged at 4.5 per cent.

The big four banks all posted gains, with Westpac leading the way and rising 25c (1.1 per cent) to $23.03.

Investment bank Macquarie Group bucked the trend to post its second day of losses after flagging a profit downgrade yesterday.

Macquarie fell 78c (2.21 per cent) at $34.47.

Gold miner St Barbara proposed consolidating its share base, and stocks in the company fell 2c to 36c.

Andean Resources, which saw strong gains in the last two trading sessions, added 4c at $7.04. The gold miner today told the stock exchange it did not breach listing rules by failing to immediately reveal a takeover proposal from Eldorado Gold.

At 0600 GMT, the Australian dollar was at US91.34c, down from US91.70c late yesterday. Against the Japanese yen, the Australian dollar was at Y76.835, from Y77.375.

(Source: TheAustralian.com.au)