The Australian share market is slipping into bad habits, once again rallying on positive overseas leads before giving up the gains in the afternoon session. Volumes remain weak, but there is a high degree of nuance in today's trading. Within sectors, investors and traders are taking a highly discerning approach.

In the Finance sector, big banks are up strongly, and property trusts are in the main positive, but insurance stocks are weaker across the board following QBE's profit downgrade yesterday. Attributed in part to a worse than expected investment performance, the downgrade is also weighing on medium sized banks and fund managers.

Small is beautiful in resources, as many of the potential takeover plays outperform the global heavyweights. Small coal stocks in particular are doing well, despite a fall in Centennial's price on the back of concerns that FIRB considerations will delay the Thai bid. Gold stocks remain under pressure on a weaker spot price outlook.

Defensive stocks are having a confusing day, with little rhyme or reason to the movers in healthcare and consumer related stocks. Telstra's announcement of job cuts has seen shareholders benefit at the expense of an additional 330 unemployed management.