A solid morning rally targeting a five-year high faded on the Australian sharemarket as the uncertainty of weakening global data prompted traders to book profits.
Following the marginally firmer lead from Wall Street the S&P/ASX 200 index had climbed 0.5 per cent by midday as investors rotated to domestic stocks and financials, but it sold off to flat before spiking to close 15.4 points, or 0.29 per cent, up at 5408.2 points.
Domestic sentiment was supported by a jump in the Conference Board leading index and bounce in skilled vacancies, but the Westpac leading index fell and data showed annual wage growth of 2.5 per cent was the lowest since the survey began in 1997 and well short of the December 2008 peak of 4.3 per cent.
Westpac economist Elliot Clarke said the deceleration in growth had been broad based across almost all of the states and industries.
Overnight sentiment soured after the US NAHB homebuilder index plunged to 46 in February from 56 in January, which was again blamed on the cold weather despite most weakness coming from the warmer west. Compound the uncertainty, the Empire Manufacturing Survey fell 4.5 in February from 12.5 in January (8.5 expected).
The Shanghai composite rallied from the red to trade 0.6 per cent up at the close of the ASX as overnight money market rates dropped to a nine-month low, but attention is firmly on tomorrows manufacturing data to see if the sector was contracted at a faster pace than in January.
In Tokyo the Nikkei index was off 0.6 per cent.
The Australian dollar dropped US0.4¢ to US90.10¢ as the US dollar gained some traction against most major currencies except the euro ahead of the release of US Federal Reserve minutes tonight.
Government 10-year bond yields fell 4.3 points to 4.141 per cent.
Gold lost $US6 to $US1315 an ounce, copper was steady at $US7170 a tonne and spot iron ore flat at $US124.40 a tonne.
The market stumbled in the afternoon on the back of weakness in the mining and materials sector, OptionsXpress market analyst Ben Le Brun said.
Strength among the major banks helped keep the market in positive territory.
Investors were still testing a market level above 5400 points, and some were taking profits, especially in iron ore miners, which had enjoyed a strong run upwards, Mr Le Brun said.
“The iron ore miners have been some of the worst performers on the day,” Mr Le Brun said.
“That seems to have been what has brought the market unstuck at this stage.”
Fortescue Metals dropped 14 cents to $5.84, despite tripling its first half profit to a record $US1.71 billion.
Atlas Iron shed 6.5 cents to $1.08 and Mount Gibson Iron fell 18.5 cents to $1.015.
BHP Billiton was 15 cents lower at $38.74 and Rio Tinto retreated 68 cents to $70.20.
In the energy sector, Woodside Petroleum dropped 13 cents to $38.37 as the oil and gas producer recorded a 41 per cent fall in full year profit.
Among other companies to report earnings, Coles owner Wesfarmers shed 22 cents to $43.18, despite lifting its first half profit by more than 11 per cent.
Online jobs advertiser SEEK soared, adding $2.37, or 18 per cent, to $15.70, after a 65 per cent rise in half year profit.
Suncorp dropped 35 cents to $12.25 after a 4.5 per cent slide in its first half profit to $548 million.
The broader All Ordinaries index was up 13.3 points, or 0.25 per cent, at 5415.5 points.
The March share price index futures contract was up 14 points at 5377 points, with 29,268 contracts traded.
National turnover was 2.1 billion securities worth $6.02 billion.