Warnings of the need for domestic belt-tightening and ongoing Chinese growth jitters sent the Australian sharemarket on a roller-coaster ride that eventually left it marginally firmer.
Following the firmer lead from Wall Street last night, the S&P/ASX 200 index opened in the black but further iron ore weakness knocked it 0.4 per cent into the red.
However bargain hunting for month-end window dressing lifted the index and it closed 2.5 points, or 0.05 per cent, up at 5489.1.
The Chinese yuan dropped to a fresh 20-month low against the US dollar, its longest losing streak in seven years.
A Chinese think-tank downgraded its growth forecasts to 7.4 per cent from 7.5 per cent following the release of regional data that showed all Chinese states missed their growth targets last quarter.
In Tokyo, the Nikkei index was up 0.1 per cent despite dismal data.
Japan's manufacturing PMI index slumped into the contraction zone at 49.4 points, down from 53.9 points, while industrial production growth of 0.3 per cent in March missed forecasts, small company confidence fell and although Japan's "cash" labour costs rose 0.7 per cent, wages excluding overtime and bonuses fell 0.4 per cent.
Overnight, the US S&P 500 rose 0.5 per cent on low volumes, buoyed by earnings reports while ignoring weakening consumer confidence and an increase in the Shiller-Case house price index that missed forecasts for a bigger rise.
The Australian dollar rose US0.3c to US92.90c as the euro weakened against major currencies following the release of German inflation last night.
Consumer inflation in the eurozone growth engine rose 1.1 per cent, missing forecasts of 1.3 per cent, raising the prospect the troubled region was slipping closer to outright deflation.
Australian government 10-year yields rose 1.1 point to 3.95 per cent following the release of March private sector credit growth of 0.4 per cent, 4.4 per cent over the past 12-months.
It was the highest level in five years but was driven by the 5.9 per cent increase in housing finance which was well below the peak of 8.2 per cent reached in 2010.
"The emergence of a durable upswing will require a significant, sustained improvement in household demand and global conditions," Westpac economist Andrew Hanlan said.
Gold was little changed at $US1293 an ounce, copper lost 0.2 per cent to $US6700 a tonne and steel rebar futures dropped 0.5 per cent.
Spot iron ore slipped 0.3 per cent to $US108.30 a tonne on Tuesday but signalling further weakness Dalian iron or futures fell 1.8 per cent today.
“The big driver has been ongoing profit taking in high yielding stocks,” CMC Markets analyst Ric Spooner said.
“The miners have been in favour today as falls in the price of iron ore have eased.”
BHP Billiton added 14 cents to $37.75, Rio Tinto gained 40 cents to $61.70 and Fortescue Metals was five cents higher at $5.05.
In the banking sector, Westpac dropped 27 cents to $35.12, Commonwealth Bank shed four cents lower to $78.90, ANZ lost 13 cents to $34.47 and National Australia Bank was 21 cents weaker at $35.30.
Woolworths shares dropped 72 cents, or 1.9 per cent, to $37.32 after the retailer's 5.3 per cent rise in third quarter sales failed to meet market expectations.
Wesfarmers, the owner of rival supermarket Coles, shed 30 cents, or 0.7 per cent, to $42.71, continuing falls from yesterday on the back of its weaker than expected sales figures.
At the close, the benchmark S&P/ASX200 index was up 2.5 points, or 0.05 per cent, higher at 5489.1.
The broader All Ordinaries index was up 3.9 points, or 0.07 per cent, at 5470.8.