Bullish sentiment buckled on the Australian sharemarket following the escalation of tensions in Ukraine, warnings of an austere Federal Budget next month and another steep loss on Wall Street on Friday.
The S&P/ASX 200 index opened just 0.3 per cent down as support at the 5400 level held, but a wave of selling knocked the index to finish 69.7 points, or 1.28 per cent, off at 5358.9 as average volume increased throughout the session.
Sentiment was knocked following clashes between Ukrainian forces and pro-Russian gunmen in the east of the country that turned deadly.
Market pundits continue to dismiss the risks of a sustained correction but the caution reflected in global bond markets suggests many investors remain unconvinced of the optimistic arguments.
The S&P 500 fell 0.95 per cent after JPMorgan's earnings fell 19 per cent and missed forecasts by 4 per cent.
The Australian dollar rose US0.2Â¢ to US94Â¢ as investors continue to shun the US dollar despite US Federal Reserve tapering of its bond purchasing program remaining on track to expire in October.
Australian government 10-year yields fell 5.3 points to 3.965 per cent while US 10-years slipped 3 points to a six-week low of 2.61 per cent, reflecting a cautious outlook on US and global growth.
Signalling the rebound in consumer spending was running out of steam credit card balances jumped 2.2 per cent to $50.2 billion in February while purchases were steady at $21.4 billion.
The Shanghai composite index was off 0.4 per cent at the close of the ASX while in Tokyo the Nikkei index was flat.
Gold climbed $US7 to $US1325 an ounce, copper rose per cent to $US6690 a tonne, nickel and on Friday spot iron ore fell 1.8 per cent to $US116.90 a tonne.
"The fall (in iron ore) reflected much lighter interest from Chinese steel mills, shying away from the spot market amid the recent step up in prices," ANZ analysts said.
"Credit conditions remain tight for the sector despite near-term fundamentals improving."
More to come