The Australian sharemarket closed slightly lower as rising global borrowing costs and central bank reluctance to increase stimulus measures clouded the growth and earnings outlook.
The S&P/ASX 200 index traded in a narrow range before sliding 12 points, or 0.23 per cent, to 5312.4 as investors waited on the sidelines for direction from the key US non-farm payroll data tonight where a print over 200,000 could stoke fears of further US Federal Reserve tapering of its bond purchasing program.
The Shanghai composite index was off 0.5 per cent at the close of the ASX on concerns over the flood of 50 initial public offerings approved in recent weeks.
China’s trade surplus narrowed to $US25.6 billion as export growth of 4.3 per cent fell short of forecasts, and economists continued to warn the data could be overstated by false “over invoicing” to circumvent capital restrictions. Imports rose 8.3 per cent as oil imports climbed 13 per cent to hit a record high.
In Tokyo the Nikkei index was off 0.2 per cent.
Last night European stocks fell after the European Central Bank kept interest rates on hold. The ECB retained an easing bias and president Mario Draghi sketched a cautious outlook as eurozone bank lending shrank for the 19th straight month in December.
Mr Draghi hinted unorthodox policies might be used to stimulate growth, but the ECB has been slow to act throughout the crisis, keeping the euro relatively strong and curbing demand for eurozone exports.
The Australian dollar rose 0.3¢ to US89¢ but government 10-year yields fell 5.8 points to 4.263 per cent as US yields slipped 2 points to 2.97 per cent.
ANZ reported that foreign investors continued to desert emerging market equities this week, while the Wall Street Journal said last year Brazil experienced its biggest currency outflow in 11 years when foreigners withdrew $US12.3 billion.
Gold rose $US6 to $US1233 an ounce, copper gained 0.3 per cent to $US7244 a tonne and spot iron ore lost 0.4 per cent to $US131 a tonne yesterday.
CommSec analyst Tom Piotrowski said weak volumes reflected a lucklustre day on the local bourse.
".... The main focus is to be able to get through tonight’s session in the US,” he said.
Markets are on guard for a stronger-than-expected US jobs result in the US overnight.
Mr Piotrowski said a strong jobs result would put investors on edge about the potential for the US Federal Reserve to taper at a faster rate.
"That’s the main dynamic at play,” he said.
Also weighing on the Australian market was Rupert Murdoch’s Twenty-First Century Fox after it announced plans late yesterday to remove its listing from the Australian Securities Exchange, following its demerger from News Corp last year.
Its voting shares had slumped by $1.77, or 4.65 per cent, to $36.31 and non-voting stock was off $1.25, or 3.23 per cent, to $37.39.
"It has certainly caused a stir in their share price. There is no talk of a share buyback or anything like that to mediate any sort of issue with them moving their shares to the other side of the world,” IG Market analyst Evan Lucas said.
The big miners were the biggest drag on the market with financials and consumer staples performing well.
BHP Billiton was down 53 cents to $36.44 and Rio Tinto had lost $1.65 to $63.65.
The broader All Ordinaries index was down 11.2 points, or 0.21 per cent, at 5316.3.
The March share price index futures contract was down seven points at 5286, with 13,183 contracts traded.
National turnover was 1.9 billion securities worth $3.4 billion.