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July 3 (Reuters) - Australian shares were flat on Monday as gains in financials and energy stocks were offset by declines in healthcare and the real estate sector and investors exercised caution following last week's wild swings on the benchmark.
Australian shares fell 1.7 percent on Friday, recording their biggest percentage fall since November 2016, in broad-based sell-off, following a slump on Wall Street.
However, the S&P/ASX 200 index rose slightly by 1.306 points, or 0.02 percent, to 5,722.8 by 0315 GMT on Monday.
"The market is fairly soft today and the volumes are low. Looks like we have been hit by some top-ten selling, that is selling of futures, which is weighing on the market," said Michael McCarthy, chief market strategist at CMC Markets, referring to ten largest companies in the index.
Financials drove the gains on the benchmark with Westpac , Commonwealth Bank of Australia, National Australia Bank and Australia New Zealand Banking Group all in the black.
Sentiment was boosted by a survey that showed that Australia's manufacturing and service sectors both enjoyed strong activity in June with upbeat demand encouraging more hiring.
Meanwhile, the energy sector was among the biggest gainers on the benchmark after oil prices edged up on Monday, supported by the first fall in U.S. drilling activity in months, although rising output from OPEC despite a pledge to cut supplies capped gains.
Oil producer Santos Ltd was up 0.8 percent while Beach Energy Ltd jumped 3.5 percent.
In other stocks, Australia's biggest retailer by sales Wesfarmers Ltd climbed 1 percent.
The Healthcare sector was the biggest drag on the index, with biotech firm CSL Ltd slipping more than 1 percent.
"CSL is just pulling back from an all-time record high, so its not unusual to see a little bit of correction in it," McCarthy added.
Real estate stocks also weighed on the benchmark with Scentre Group and Stockland Corp Ltd slipping more than 1 percent each.
Home prices in Australia's major cities rebounded in June after a pullback the month before, but there were early signs the market was cooling as regulators tightened the screws on leveraged property investors.
Among the other big losers was Fairfax Media, which slumped as much as 16.8 percent to a near-four month low after it said it had ceased discussions with two U.S private equity suitors, undermining investor expectations for a bidding war for Australia's oldest newspaper publisher.
New Zealand's benchmark S&P/NZX 50 index edged 0.1 percent or 4.32 points lower to 7,607.12.
Fisher Paykel & Healthcare accounted for most of the losses, falling about 1 percent.
Ebos Group and Chorus Ltd were the other major losers on the index, shedding 1.6 percent and 1.2 percent respectively.
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Reporting By Shashwat Pradhan in Bengaluru; additional reporting by Sindhu Chandrasekaran; Editing by Christian Schmollinger