The Australian sharemarket finished slightly lower as investors narrowed their buying focus to the three major banks and Wesfarmers, while Rio Tinto reversed much of yesterday's gains.
Following the negative lead from offshore markets the S&P/ASX 200 index opened 0.2 per cent down, edged into the black and closed 3 points, or 0.06 per cent, down at 5033.9 points with ANZ the only big-bank loser after reporting a 20 per cent drop in net profit.
AMP Capital Investors' data shows that with 25 per cent of the earnings season complete, 49 per cent of companies have beaten the low -bar of earnings expectations, better than the 36 per cent achieved in August, but 30 per cent were in line, down from 50 per cent and 21 per cent had missed, up from 16 per cent.
Signalling ongoing uncertainty the Australian Industry Group annual outlook report showed that a most business leaders do not expect general business conditions to improve in 2013 as the mining investment boom slows.
The survey of 350 business leaders showed thirty-seven per cent of businesses planned to reduce staff numbers and 38 per cent planned no change, while the manufacturing and construction sectors revealed the bleakest outlook.
Bullish sentiment was on the back foot after German, French and broad eurozone GDP joined Japan in contracting more than forecast. European GDP fell 0.6 per cent compared to the forecast 0.4 per cent, while the German economy contracted 0.6 per cent and France 0.3 per cent, both 0.1 per cent worse than consensus forecasts.
European stocks were down 0.8 per cent on average but Wall Street closed marginally higher after Warren Buffet's Berkshire-Hathaway fanned takeover hopes when it launched a $US23.3 billion bid for food giant HJ Heinz.
In Tokyo the Nikkei index fell 2 per cent after economics minister Akari Amari backtracked on his call for the Nikkei to reach 13,000 points by March, saying the government had not target for the stock market.
The yen also strengthened ahead of the G20 summit this week on expectations Japan may face criticism from its attempts to weaken then yen through "verbal intervention" and ultra-easy monetary policies.
The Australian dollar edged up to $US1.0370 as the New Zealand rallied following strong December-quarter retail sales growth.
Gold slipped to its four month low of $US1631 an ounce, with Bloomberg reporting that gold traders were the most bearish in more than a year on mounting speculation improved growth in the US and China would curb safe-haven demand.
Copper was little changed at $US8250 a tonne, down 0.5 per cent for the week.More to come