The Australian share market closed flat on Monday as weakness among materials stocks outweighed strength in the banking sector. The benchmark S&P/ASX200 index was down 4.7 points, or 0.1 per cent, to 4,688 points, while the broader All Ordinaries index backtracked 5.5 points, or 0.12 per cent, to 4,773.3 points.

The industrial sector was the top performer thanks to a surge in Brambles' share price. Its shares closed up 35 cents, or 5.36 per cent, at $6.88. The logistics company said it would purchase Dutch based IFCO Systems NV and its re-usable plastic container business for 923 million euros.

Among the major banks, Commonwealth Bank was up 31 cents at $48.86, National Australia Bank added 14 cents at $24.67, Westpac eased two cents to $21.92 and ANZ was down 14 cents at $23.08. Wealth manager AMP has made a new offer to buy rival AXA Asia Pacific Holdings, together with French insurance and wealth giant AXA SA, worth $13.3 billion.

Under a scheme of arrangement proposal, AXA APH minority shareholders will receive at least $6.43 per share in value from AMP. Both firms gained ground after emerging from trading halts. AMP found 12 cents, or 2.25 per cent, at $5.45, while AXA appreciated 39 cents, or 6.75 per cent, to $6.17.

AXA Asia Pacific was the best performing stock on the S&P/ASX 100 index. The worst performing stock on the S&P/ASX 100 index was Commonwealth Property Office Fund, which announced an entitlement offer at 86 cents per new security to raise about $115 million. It also said it had completed a $159 million institutional placement. The fund's securities finished down 5.248 cents, or 5.85 per cent, at 84.5 cents.

In other headlines, BHP Billiton announced it had withdrawn its $45 billion bid for Canadian fertiliser company Potash Corporation of Saskatchewan Inc. BHP Billiton shares finished 16 cents weaker at $44.14 while Rio Tinto put on 18 cents at $87.04. OneSteel said its near $1 billion takeover of grinding media and steel products businesses from global mining group Anglo American was a major step in its long-term growth strategy.

Shares in OneSteel were steady at $2.74. The top traded stock by volume was Grand Gulf Energy, with almost 90 million shares worth $753,865 changing hands. Grand Gulf Energy shares was up 0.1 cents, 14.29 per cent, at 0.8 cents. Preliminary national turnover was 2.48 billion shares worth $4.75 billion, with 460 stocks up, 668 down and 355 unchanged.

The Australian dollar fell broadly in Asia trade Monday as Europe's debt problems continued a move into safe haven assets. Even with the U.S. dollar and other safe-haven assets up since Friday, Australian bonds also fell. Traders said the moves reflected a broader unwinding of trades, when buying equities and buying for yield dominated the action.

In terms of the Australian dollar's move, sentiment across Asia was cautious, given concerns over the health of European sovereign debt and worries about the possibility of further China monetary policy tightening as Beijing faces the potential for inflation and asset price bubbles. The Australian dollar traded at $0.9849, down from $0.9937 late Friday and at its lowest level in two weeks. Against the Japanese yen, the currency traded at 81.43, from 81.89.