Evidence of weakening domestic and Chinese growth momentum pushed the Australian sharemarket into the red again today.
The S&P/ASX 200 index opened in the black but dropped steadily to close 25.2 points, or 0.47 per cent, down at 5324.9 after the AiG performance of services index showed the services sector, which accounts for more than 70 per cent of the economy, contracted at a faster pace in December.
Dashing expectations of a solid Christmas trading period and signalling the end of the post-election bounce in consumer confidence, the index slumped 2.8 points to 46.1 points, with just finance, insurance and heath care sub-groups expanding.
The Australian dollar slipped from its high of US90¢ reached last week to US89.50¢, while government 10-year yields jumped 4.6 points to 4.389 per cent. US benchmark 10-years weer 2 points up at 3 per cent.
The Shanghai composite index was off almost 2 per cent at the close of the ASX after authorities approved another 11 initial public offerings over the weekend, taking the total to 25 and stoking fears the new offerings would divert buying interest from existing stocks.
Sentiment was also hit by the biggest drop in HSBC’s China services PMI index in eight months to 50.9 points, the lowest level in more than two years as soaring interest rates crimped growth.
“Output and new orders increase at weaker rates at both manufacturers and service providers,” HSBC said.
Trading for the first time in a week, the Nikkei index fell 2 per cent as the stronger yen and weakening regional growth outlook hit sentiment.
Gold climbed $US4 to $US1239 an ounce, copper pared its overnight 0.8 per cent loss, bouncing 0.3 per cent to $US7334 a tonne while spot iron ore was unchanged at $US135 a tonne on Friday.
Morgans client adviser Alistair McCorquodale said the local market had fallen steadily throughout the day with declines in most sectors.
“It’s been a fairly down day,” Mr McCorquodale said.
“A bit of impetus has come out of the US market, which has taken a breather and been a little bit weaker since the New Year.”
The US corporate earnings season is getting underway this week as investors prepare for the release of overseas data.
“The Australian market is just waiting for direction that will come through the European and US markets tonight,” he said.
“We’re just in a bit of a wait-and-see mode.”
Among the big miners, BHP Billiton lost 21 cents to $37.56, Rio Tinto dropped 61 cents to $67.75, and Fortescue Metals fell 11 cents to $5.71. Gold miner Newcrest was five cents poorer at $8.62.
Among the major banks, Westpac eased 22 cents to $32.12, ANZ reversed 22 cents to $31.99, and National Australia Bank fell 14 cents to $34.55, but Commonwealth Bank gained two cents to $77.60.
Property companies were some of the few stocks to finish higher, with Mirvac shares rising 1.5 cents to $1.72 and Stockland gaining 4.5 cents to $3.68.
The broader All Ordinaries index was down 24.1 points, or 0.45 per cent, at 5327.7.
The March share price index futures contract was down 12 points at 5300, with 19,218 contracts traded.
National turnover was 1.2 billion securities worth $1.9 billion.