ASX closes marginally lower
The Australian sharemarket rally faltered as metal prices and iron ore futures fell in China and investors searched for new catalysts to drive the market out of its six-month trading range.
The S&P/ASX 200 index closed 6.1 points, or 0.11 per cent, down at 5518.9 as Chinese stocks floundered and Dalian iron ore futures fell 1.8 per cent on concerns the Chinese government was committed to rebalancing the economy and consequently, slower growth.
Xinhua News Agency reported former central bank adviser Xia Bin, as saying that a long-term downturn in China's property market is "certain."
The Shanghai composite index was off 0.2 per cent at the close of the ASX while in Tokyo the Nikkei index was off 0.3 per cent.
Bullish global equity market sentiment faded on Friday after German factor orders fell a worse than forecast 1.7 per cent and Austria's Erste Group Bank dived 14 per cent after taking hefty bad loan write-downs from its Hungarian subsidiary bank.
While equity markets and most economists remain bullish on the US growth recovery, others caution that the world's biggest economy lacks solid momentum.
"Historically weak participation amongst young and prime-aged workers points to there still being a substantial degree of slack in the labour market," Westpac economist Elliot Clarke said. "This is also apparent in the prevalence of temporary and part-time workers, as well as continued weak real wages growth. Consumers therefore continue to rely on consumer credit to partly fund consumption, particularly for education and durable goods."
The Australian dollar was little changed at US93.50 while government 10-year yields firmed one point to 3.597 per cent and US 10-years rose 2 points to 2.66 per cent.
Giving a lift to sagging domestic growth hopes the AiG performance of construction index jumped 5.1 points to 51.8 points.
Copper fell 1.3 per cent to $US7085 a tonne, gold lost $US8 to $US1313 an ounce and spot iron ore was flat at $US96.50 tonne on Friday.
More to come…
