Optimistic comments by Reserve Bank Governor Philip Lowe that Australia’s economic downturn may not be as bad as previously thought have helped both stocks and the Australian dollar shake off early losses.

The S&P/ASX200 benchmark index was lower by 6.7 points, or 0.11 per cent, at 5935.9 points at 1200 AEST on Monday after slipping nearly one per cent in early trade.

The All Ordinaries index was 11.7 points, or 0.19 per cent lower, at 6049.9.

The market recovered after Mr Lowe said the economy is benefiting from the way the government has responded to the pandemic, and the outlook has improved.

The early setback follawed followed a weak lead from the US last week, where new cases of COVID-19 have increased markedly in some US states.

In Australia, Victorian Premier Daniel Andrews has reimposed restrictions after 25 new coronavirus cases were recorded on Saturday and a further 19 on Sunday.

Energy, consumer discretionary and property stocks continued to trade lower.

Among financials, ANZ gained 0.53 per cent to $18.85 and the Commonwealth Bank was up 0.68 per cent to $69.15, while NAB lost 0.37 per cent to $18.60 and Westpac declined by 0.22 per cent to $18.13.

The big miners were trading better.

BHP gained 0.94 per cent to $35.34, Rio edged up by 0.59 per cent to $96.85 and Fortescue rose 0.11 per cent to $13.80.

Transurban shares dropped 2.24 per cent to $14.82 after the company said it will pay a reduced second half distribution due to a fall in traffic volumes from the coronavirus pandemic.

Security-holders will receive 16 cents per share, unfranked, for the six months to June 30, down from 30 cents previously.

James Hardie jumped 5.96 per cent to $28.29 after it lifted its guidance for the June quarter following improved housing market activity, particularly in North America.

Metcash shares dropped 1.77 per cent to $2.88 after it posted a $56.8 million full-year loss but bounced back with the company highlighting sales growth momentum into the new financial year.

The Australian dollar edged ahead after the central bank governor signalled he was comfortable with the currency’s steep rise in recent weeks.

It was buying 68.42 US cents at 1200 AEST, down from 68.59 US cents at the close of trade on Friday.