The Australian sharemarket staged a tentative bounce but volume was below average as geopolitical risks remained elevated and caution high.
The S&P/ASX 200 index gained 0.7 per cent mid-session but slipped to close 21.7 points, or 0.4 per cent, up at 5457 as the lacklustre earnings season and weakening domestic growth outlook did little to feed bullish sentiment.
The Australian dollar edged up US0.3¢ to US92.75¢ and government 10-year yields jumped 12.2 points to 3.401 per cent as global jitters eased following the ending of Russian military exercises on Ukraine’s border on Friday.
“While we doubt geopolitical crises in the Ukraine and Iraq will have lasting impact on markets, especially with low and stable energy prices, we see some risks to global growth confidence when Chinese economic, credit and property data are released this week,” Royal Bank of Scotland currency strategist Greg Gibbs said.
“The key risks lie in credit growth and the property market. The former has been too strong and the latter too weak for comfort this year.”
The Shanghai composite index climbed 1.3 per cent at the close of the ASX after July consumer price inflation of 2.3 per cent was unchanged and met forecasts, boosting hopes the central bank will cut rates to support growth.
In Tokyo the Nikkei index bounced 2.4 per cent ahead of Wednesday’s June-quarter GDP data which is forecast to plunge 7 per cent.
“With much of the “bring-forward” in growth ahead of the April consumption tax concentrated in Q1, it appears that the retrenchment in Q2 may be so large to suggest that economic growth will struggle to remain above trend,” Mr Gibbs said.
Dalian iron ore futures were up 0.4 per cent following a 0.5 per cent drop in the spot price to $US95.50 a tonne on Friday.
Copper bounced 0.5 per cent to $US7030 a tonne and gold slipped $US4 to $US1306 an ounce.
IG market analyst Stan Shamu said despite the gains, equities were still at risk of being sold into strength in the near term as confidence remained subdued.
“While equities are flying in Japan, the ASX 200 has only managed to put on around half a per cent, with the banks mainly responsible for the gains,” Mr Shamu said.
The local market opened in positive territory after a strong performance from Wall Street on Friday night, where both the Dow Jones Industrial Average and the S&P 500 index rose more than one per cent.
Among the big four banks, Commonwealth Bank was up 28 cents at $80.41, ANZ had lifted 18 cents to $32.44, NAB was up 10 cents at $32.92 but Westpac was down six cents at $32.97, according to preliminary figures.
Resources giant BHP Billiton had gained 28 cents to $38.02, Rio Tinto had lifted 32 cents to $66.75, while Fortescue Metals was two cents lower at $4.54.
One of the weakest performers was electronics retailer JB Hi-Fi, with its shares down nearly eight per cent after a slide in sales during July overshadowed a 10 per cent increase in its annual profit.
JB Hi-Fi shares were down $1.53 at $17.84.
Bendigo and Adelaide Bank shares were up 28 cents at $12.46 after it increased its full year profit by six per cent to $372.3 million, with improved revenue and margins.
Shares in Treasury Wine Estates were up 20 cents at $5.33 after the Penfolds owner received a second takeover proposal from a private equity firm.
The broader All Ordinaries index was up 19.8 points, or 0.36 per cent, at 5449.4.
On the ASX 24, the September share price index futures contract was 21 points higher at 5397, with 26,066 contracts traded.
National turnover was 1.4 billion shares worth $3.1 billion.