The Australian sharemarket ranged in and out of the red before closing marginally firmer as fears of another Middle-East war and a third batch of weak US data kept investors on the sidelines.
The S&P/ASX 200 index closed 5.8 points, or 0.11 per cent, up at 5141.2 points after Wall Street fell 0.4 per cent following comments by US Secretary of State John Kerry that President Barack Obama would hold Syria’s government accountable for using chemical weapons.
The rout in emerging market currencies, bonds and equities was ignored by domestic stocks, but the Australian dollar fell1.2¢ from its overnight high to US89.50¢ as war fears drove investors towards the relative safety and liquidity offered by the US dollar.
India’s Sensex index fell 2.4 per cent and Indonesia’s Jakarta composite index fell 3 per cent, while the Indian rupee fell 2 per cent to a record low and the Indonesian rupiah fell 1.8 per cent.
Prior to Mr Kerry’s comments markets were torn between a slump in US durable goods orders that signalled the US economy was not nearly as strong as economists hoped but raised hopes that the mounting list of weak data could forestall the US Federal Reserve’s plans to taper its bond purchases next month.
In July durable goods orders fell 7.3 per cent, mostly as “payback” from the surge in airline orders in June.
“But even allowing for this inevitable monthly noise from volatile defence and aircraft orders, core orders dropped 3.3 per cent, taking them back to April’s levels,” National Australia Bank senior economist David De Garis said.
“At the minimum, it will give the Fed pause for thought about whether the economy is losing some of its growth momentum into Q3.”
Australian government 10-year yields slipped 6.4 points to 3.948 per cent, while US 10-years eased 3 points to 2.79 per cent.
The Shanghai composite index was flat at the close of the ASX, while in Tokyo the Nikkei index was down 0.7 per cent.
Gold edged up $US5 to $US1401 an ounce, while copper bounced 0.5 per cent to $US to pare its 2 per cent overnight slump on the weak US durable goods data.
The broader All Ordinaries index was up 3.7 points, or 0.07 per cent, at 5130.8. On the ASX 24, the September share price index futures contract was eight points lower at 5118, with 16,574 contracts traded.
Demand for the major banks again kept the broader market in the black.
Commonwealth Bank climbed 89¢ to $73.47, National Australia Bank firmed 11¢ to $32.66 and ANZ rose 6¢ to $29.88, but Westpac lost 7¢ to $31.61.
Among the miners, BHP Billiton firmed 2¢ to $35.60, Rio Tinto eased 7¢ to $59.74 and Western Areas dived 32¢ to $2.98.
Flight Centre was the biggest gainer, leaping $3.81 to $48.41.Telstra was unchanged at $4.88 and Woolworths climbed 34¢ to $33.91.