The Australian sharemarket lost ground today as offshore stocks closed in the red on the first trading day of the year for the first time in six years despite global borrowing costs ticking lower.
The S&P/ASX 200 index was off 0.8 per cent at its worst but bargain hunters pared the loss, leaving the index 17.8 points, or 0.33 per cent, down at 5350.1 as investors shrugged off another weak session for Chinese and Hong Kong stocks.
The Australian dollar also dodged regional currency weakness, rising 0.7¢ to US89.90¢ despite broad US dollar strength against most major currencies.
National Australia Bank currency strategist Emma Lawson said the overnight session was marked by “series of relatively random market moves overnight; each not quite gelling with one another”.
She said there was potentially “some signal in the general wash”, but it might take an increase in market participation, liquidity and news-flow to parse out.
Many of the moves were suggestive of position unwinding in the major currencies such as the yen which also rebounded strongly, while emerging market currencies were hammered.
“Countries which require capital may find things a little harder in 2014,” she said.
Australian government 10-year yields rose 1.4 points to 4.343 per cent while US 10-years dropped 4 points to 2.99 per cent.
The Shanghai composite index was off 1.3 per cent near five-month lows as the new initial public offering pipeline was increased to 16, sparking fears of buying power dilution, while sentiment was also hit by China’s non-manufacturing PMI index dropping1.4 points to 56.
Japanese markets were closed again for a public holiday but Hong Kong’s Hang Seng index was off 1.9 per cent.
Gold firmed $US6 to $US1230 an ounce, copper reversed a 0.5 per cent overnight rally to trade slightly lower at $US7355 a tonne and spot iron ore rose 0.6 per cent to $US135 a tonne.
Oil prices, however, tumbled, with Brent crude falling 2.7 per cent to $US108 a barrel, as global indicators reflected loss of global growth momentum in the December-quarter.
Shares opened in negative territory and remained there for day, IG market analyst Chris Weston said.
"We have priced in a pretty poor lead from Wall Street,” Mr Weston said.
"For the rest of the day we’ve traded within an 18 point range and that’s despite the Chinese market falling well over one per cent."
In the United States, Wall Street kicked off the new year in the red as investors took profits following solid gains in 2013.
Trading volumes were light again on Friday, but most traders will be back at their desks on Monday, ahead of the release of important data from China and the start of US corporate earnings season, among other things.
"Next week we’ll have a clearer idea about whether the pullback we saw is for real or whether we’ll see a new wave of buying coming back into the market,” Mr Weston said.
Among the big miners, BHP Billiton fell 43 cents to $37.77, Rio Tinto shed 35 cents to $68.36 and Fortescue Metals was 11 cents lower at $5.82.
The gold miners performed better, with Newcrest up 22 cents at $8.67.
The big four banks underperformed, with Westpac flat at $32.34, ANZ lost one cent to $32.21, Commonwealth Bank shed 26 cents to $77.58 and National Australia Bank was 14 cents lower at $34.69.
The broader All Ordinaries index was down 18 points, or 0.34 per cent, at 5351.8.
The March share price index futures contract was 33 points lower at 5312, with 18,443 contracts traded.
National turnover was 1.3 billion securities worth $2.2 billion.