The Australian sharemarket closed marginally lower after mixed manufacturing data across Europe and the US clouded the global growth outlook.
Following the flat lead from Wall Street the S&P/ASX 200 traded in the red for the whole session and closed 4.3 points, or 0.08 per cent, down at 5583.5 as investors struggled for buying catalysts ahead of the start of the earnings season next month.
Last night a solid increase in the German manufacturing and services PMI indices boosted confidence, but France’s manufacturing PMI dropped deeper into the contraction zone and the US PMI dropped sharply while still remaining firmly in the expansion zone.
US sentiment was dented by an 8.1 per cent slump in June new home sales and downgrades to previous months.
“Factors some commentators are citing as holding back the housing market include credit conditions that remain relatively tight and a lack of mortgage loan growth,” Royal Bank of Scotland currency strategist Greg Gibbs said.
“This is surprising given that credit in most other sectors including for corporate loans and bond issues appears at least as easy as previous cycles.”
He said solid recoveries in US manufacturing, employment and consumer confidence supported the notion of an economy approaching the lift off for interest rates sooner than mid-2015.
“However, a lack of vigour in the housing market remains a drag on the US economy and may limit or delay its recovery,” he said.
The Australian dollar slipped US0.2¢ to US94.15¢ while government 10-year yields again reversed early gains to finish 1.6 points up at 3.441 per cent. US 10-years rose 4 points to 2.49 per cent.
The Shanghai composite index was up another 0.6 per cent at the close of the ASX after emerging market guru Mark Mobius, chairman of Templeton Emerging Markets Group told Bloomberg Chinese markets could rise 20 per cent as the government reformed undervalued state-owned enterprises.
In Tokyo the Nikkei index was up one per cent .
Spot iron ore eased to $US93.60 while Dalian iron ore futures rose 0.5 per cent today.
Copper leapt 1.8 per cent to $US7180 a tonne on the firmer global manufacturing data while gold slipped 4US5 to $US1291 an ounce.
Investors would be looking for a new catalyst to push through current levels ahead of the August company reporting season, IG market strategist Stan Shamu told AAP.
However it was encouraging the market had not been adversely affected so far by bad press related to geopolitical events including the MH17 aircraft tragedy in which Australians died and violent conflict in Gaza, he said.
“It is quite evident there is still quite a lot of risk for markets particularly with earnings coming up,” he said.
“You tend to find after a long period of gains some investors then have to take some profits off the table and then wait for the results season to see what plays out.”
Most sectors traded in the red with gold stocks making the biggest losses and financial stocks bucking the trend to finish higher.
Newcrest Mining, the nation’s largest gold miner, closed lower again after a 6 per cent fall yesterday when it flagged asset write-downs of up to $2.5 billion.
Newcrest lost eight cents on Friday to close at $10.70, according to preliminary data.
The big miners were mixed, with BHP losing six cents to $39, Rio Tinto dropping 16 cents to $65.09 and Fortescue up one cent to $4.58.
Commonwealth Bank added 27 cents to $82.28, Westpac was up 15 cents at $34.28, ANZ gained 17 cents to $33.75 and National Australia Bank was 10 cents higher at $34.59.
The broader All Ordinaries index was down 2.6 points, or 0.05 per cent, at 5574.2, according to preliminary figures.
The September share price index futures contract was two points lower at 5530 points, with 23,329 contracts traded.
National turnover was 1.8 billion shares at a value of $5.4 billion.