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The market has closed lower. Picture: AP.
The market has closed lower. Picture: AP.

The Australian sharemarket touched a six-year high but slipped back to end its seven-day winning streak as Chinese stocks struggled again and weak US data undermined the global growth outlook.

The S&P/ASX 200 index jumped 0.4 per cent to a high of 5460 points in line with the rally on Wall Street last night, before sliding to close 6.4 points, or 0.12 per cent, at 5433.8 as fears of the impact of Chinese property curbs weighed on miners.

Uncertainty was also fanned by the ongoing weakening of the Chinese yuan, with reports suggesting the People’s Bank of China was engineering the weakness to end the perception of a one-way bet before it broadens the official trading range.

“The fall in (yuan) is probably still not severe enough to flow over to global emerging market and commodity currencies,” Royal Bank of Scotland currency strategist Greg Gibbs said.

“Most seem to think it has largely been engineered by the Chinese authorities squeezing out some of the weaker global investor positions.”

The Shanghai composite index bounced 0.5 per cent in early trade but after a dip into the red it was trading slightly firmer at the close of the ASX.

In Tokyo the Nikkei index was up 1.6 per cent as the yen weakened against the US dollar.

The Australian dollar jumped US0.6¢ to US90.50¢, but dipped to US90.20¢ as equity sentiment soured.

Overnight the US S&P 500 index hit a record high but eased to close 0.6 per cent up as the Dallas Fed activity index and the Chicago Fed national activity index both fell much more than expected.

Sentiment was supported by a rise in the German IFO business confidence survey to a two-year high, but a fall of 1.1 per cent in January eurozone inflation confirmed the region was on the brink of deflation.

Gold rose $US5 to $US1333 an ounce, copper pared its drop yesterday to trade 0.5 per cent of its low at 7090 a tonne and spot iron ore slumped 2.2 per cent to marginal eight month low of $US119.90 a tonne.

IG chief market strategist Chris Weston said as soon as the bulls pushed the market to historic highs, the bears then smacked the market in an aggressive fashion.

"We’ve got reporting season out of the way and a lot of good news was priced into stocks, and China has been under a bit of pressure and the iron ore price has come off,” he told AAP.

Among miners exposed to the iron ore price, BHP Billiton dropped 28 cents to $39.10, Rio Tinto shed 93 cents to $68.62 and Fortescue Metals lost 15 cents to $5.84.

The big four banks were relatively flat, with Westpac down 15 cents to $33.42, Commonwealth Bank down nine cents to $75.27, NAB up eight cents to $34.51 and ANZ two cents higher at $32.02.

Qantas shares shed half a cent to $1.235, as speculation continued about how many thousands of jobs the airline is set to cut, and the federal government said it was drafting laws to remove its foreign ownership limits.

GrainCorp shares dropped four cents to $7.77 after the company said it expects a fall in its full year profit.

QBE was one of the better performers, despite posting a full year loss, as the result was not worse than the company had forecast.

Its shares gained 62 cents to $12.27.

The broader All Ordinaries index was down 6.1 points, or 0.11 per cent, lower at 5444.

The March share price index futures contract was 13 points lower at 5410, with 25,954 contracts traded.

National turnover was 2.05 billion securities worth $5.3 billion.