The Australian share market is flat in a quiet day of trade with much of the country observing the Labour Day public holiday.

Gains for industrial and retail shares were offset by losses among mining stocks, as investors watch developments in the US budget impasse.

There are concerns the US congress will not be able to resolve negotiations on raising the debt ceiling by October 17, when Department of Treasury officials expect the government to run out of money.

Trading volumes were light, on a public holiday for New South Wales, the ACT, Queensland and South Australia.

At 11:30am (AEDT) the benchmark ASX 200 index was 2 points higher at 5,208 and the broader All Ordinaries index had also gained 2 points to 5,209.

Shares in Leighton Holdings have gained 3.4 per cent after a sell off late last week.

The against allegations it breached continuous disclosure rules under the Corporations Act in relation to allegations of corruption and bribery in Iraq.

Shares in Australia's last remaining independent grain handler Graincorp were down 1.3 per cent after Federal Treasurer Joe Hockey announced last last week on a $3 billion takeover by US agribusiness Archer Daniels Midland until December 17.

The big four banks were mixed; ANZ Bank has gained 0.4 per cent, and Westpac has put on 0.2 per cent, but the Commonwealth Bank has lost 0.5 per cent and NAB was down 0.4 per cent.

The major mining stocks were also out of favour; BHP Billiton has lost 0.2 per cent, while its main competitor Rio Tinto has given back 4 cents.

The Australian dollar has advanced as the US government deadlock weighs on the greenback; the dollar was fetching 94.5 US cents.

 

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