The sharemarket has fallen due to a worse than expected fall in business investment in the December quarter.
Trading was also marked by a sharp fall in the value of Qantas shares, after the airline said it will axe 5000 jobs after making a $252 million half year underlying loss.
IG market strategist Stan Shamu said public attention may have been on Qantas, but the bigger concern for the market was the disappointing capital expenditure, or capex, data.
There was a 5.2 per cent decline in business investment during the December quarter, well above the one per cent decline the market had expected.
The disappointing figures could indicate weaker than expected economic growth during the quarter.
Mr Shamu said they also do not justify the recent shift by the Reserve Bank of Australia towards a neutral stance on interest rates.
"I think that's why we're seeing the market being sold off," he said.
Qantas shares lost 11.5 cents, or 9.1 per cent, to $1.155.
Mr Shamu said the sharp fall in Qantas reflected the uncertainty surrounding the airline's future rather than the job cuts and the first half loss, which had been largely expected.
Broadcaster Nine Entertainment nudged up one cent to $2.29 after the recently relisted company showed it is on track to beat its forecasts for full year earnings.
Seven Group dropped 16 cents to $8.01 after an economic slowdown in its key media and industrial businesses hurt half year earnings.
In the resources sector, BHP Billiton shed 20 cents to $38.38, Rio Tinto dumped 37 cents to $66.60, and Fortescue Metals lost 18 cents to $5.50.
Among the major banks, Commonwealth Bank dropped 29 cents to $75.20, National Australia Bank eased five cents to $34.82, Westpac shed two cents to $33.54, while and ANZ gained seven cents to $32.15.
- At the close on Thursday, the benchmark S&P/ASX200 index was down 25.6 points, or 0.47 per cent, at 5,411.4 points.
- The broader All Ordinaries index was down 26 points, or 0.48 per cent, at 5,421 points.
- The March share price index futures contract was 42 points lower at 5,395 points, with 25,672 contracts traded.
- National turnover was 2.03 billion securities worth $4.8 billion.