Stocks in Australia's biggest mining companies rose Monday as the government's plans for a new tax on their profits were thrown into doubt after the nation's closest election in almost 50 years delivered no clear mandate.
Trading in the rest of the market was flat, however, and Australia's chamber of commerce urged companies to continue investing despite what will likely be two or three weeks of uncertainty about who will govern the country for the coming three years.
The centre-left Labor Party - which has ruled for the past three years and remains in control of the caretaker government - and the conservative Liberal Party are negotiating with independent and minor party lawmakers to decide which side can command 76 seats in the 150-seat House of Representatives.
"The continuation of the caretaker period of the Australian government, together with the prospect of a minority Australian government is not the ideal scenario for the Australian economy or business community," the chamber's chief executive Peter Anderson told reporters.
"The business community ... needs to ensure that the Australian economy is well respected nationally and internationally and we can do that by getting on with the doing of business, not putting investment decisions on hold and not adding to any uncertainty," he added.
On the first trading day since the election Saturday, Julia Gillard, the caretaker prime minister, said on Monday that the flat market showed "the market understands that stable government is continuing".
"Obviously there is uncertainty over the election result, but there is no uncertainty over the fact that stable and effective government is continuing in this period of time," she added, without indicating when the next government would be sworn in.
Gillard and Liberal leader Tony Abbott arrived in Canberra on Monday where confidential negotiations will take place with three key independents: Rob Oakeshott, Tony Windsor and Bob Katter.
The three independents planned to hold kingmaker strategy meetings in Canberra starting Tuesday at the earliest, Oakeshott's spokesman Garth Norris said.
Mining stocks were buoyed by the voter backlash against Labor which had promised to impose a 30 percent tax on iron ore and coal miners profit to raise an additional 10.5 billion (AU$9.4 billion) in government revenue in two years.
But if Labor can form a government in the lower chamber, the environmentally oriented Greens party promised that the tax will be carried through the senate, where the Greens' nine senators will ensure a majority in the 76-seat upper chamber.
Gillard said Monday she remained committed to introducing the tax if she can form a minority government, despite the tax being blamed for Labor losses in the mining states of Queensland and Western Australia.
AP