The Australian sharemarket lost ground again after US growth optimism was dealt a heavy blow by US non-farm payroll data on Friday.
Wall Street finished firmer last week on renewed stimulus hopes, but the S&P/ASX 200 index slipped to close 20.3 points, or 0.38 per cent, down at 5292.1, with a rotation to miners sparing a steep loss.
The US economy created just 74,000 jobs last month, almost a third of the consensus forecast of 197,000, with cold weather blamed for a “rogue number” that could be revised higher.
“What the payroll print has done is squash concerns that the Fed could accelerate the pace of QE tapering beyond $10 billon per meeting,” National Australia Bank global head of currency strategy Ray Attrill said.
“A January 29 announcement of a further $10 billion tapering by and large remains intact, and indeed Friday’s two Fed speakers, (James) Bullard and (Jeffrey) Lacker (albeit both non-2014 FOMC voters) both suggested tapering is unlikely to be suspended.”
The Australian dollar bounced US1¢ to US90.30¢ as the US dollar slipped against most major currencies, with investors ignoring the 0.3 percentage point drop in the US unemployment rate to 6.7 per cent which was flattered by the continued plunge in the participation rate.
Australian government 10-year yields dropped 3.1 points to 4.23 per cent after US benchmark 10-years tumbled 12 points to 2.88 per cent on the revised outlook for US Federal Reserve bond purchases.
The Shanghai composite index opened firmer but was trading slightly lower at the close of the ASX as investors remained unconvinced reports of a slowing pace in initial public offerings could offset negative sentiment surrounding the weakening earnings and growth outlook.
Japanese markets were closed for a public holiday.
Gold was a major beneficiary of US dollar weakness, jumping $US25 to $US1250 an ounce, while copper jumped 1.2 per cent to $US7300 a tonne and spot iron ore eased 0.2 per cent to a six-month low of $US130.70 a tonne.
CommSec market analyst Steven Daghlian said it was the sixth session in seven trading sessions that the local market had finished in negative territory.
"It was always going to be a bit of a struggle to get into the black today because we had a disappointing jobs report out of the US on Friday,” Mr Daghlian said.
"That influenced our market today but it did have a positive impact on the mining sector."
Mr Daghlian said as a result the US dollar lost ground which led to a rise in commodities prices.
"That’s significantly helped the likes of BHP Billiton and Newcrest with a rise in the gold price,” he said.
Australia’s largest gold miner Newcrest finished 51 cents, or 6.1 per cent, higher at $8.87 and diversified mining giant BHP Billiton was 12 cents, or 0.3 per cent, higher at $36.56.
However, iron ore-focused Rio Tinto was 14 cents lower at $63.51 and Fortescue Metals had dropped six cents to $5.14.
Among the major banks, Westpac had dropped 21 cents to $32.01, ANZ fell 23 cents to $31.33, Commonwealth Bank shed 60 cents to $77.00 and National Australia Bank reversed 33 cents to $34.24.
Telstra fell one cent to $5.25 after announcing it would sell a 70 per cent stake in directories business Sensis for just over $450 million.
Transurban was three cents richer at $6.82 after strong traffic growth on the tollway operator’s Sydney roads helped boost half year revenue.
Takeover target Warrnambool Cheese and Butter nudged up three cents to $9.24 as Canadian suitor giant Saputo lifted its stake in the company to more than 26 per cent.
Freight rail operator Asciano improved two cents to $5.64 as it entered into a 12-year haulage agreement with Whitehaven Coal.
The broader All Ordinaries index was down 19.5 points, or 0.37 per cent, at 5296.8.
The March share price index futures contract was 31 points lower at 5259, with 5290 contracts traded.
National turnover was 1.2 billion securities worth $2.4 billion.