ASX ends choppy session firmer

The Australian sharemarket finished a choppy session slightly firmer as the Australian dollar hit a near five-year low and a looming election in Greece stoked eurozone jitters.

The S&P-ASX 200 index climbed 0.4 per cent in morning trade but it dropped to close 14.4 points, or 0.26 per cent, up at 5450.3 with energy stocks ignoring the ongoing nosedive in oil prices.

The dollar fell US0.7¢ to US80.60¢ and the euro dived 2.6 per cent against the US dollar to 1.1940 against the US dollar after European Central Bank president Mario Draghi warned on eurozone deflation and said the bank was ready to implement quantitative easing this year.

“USD strength continues to be the dominant theme for markets in the New Year,” National Australia Bank economist Spiros Papadopoulos said.

This was despite some weaker-than-expected US data.

Markets jitters were also stoked by newspaper reports German Chancellor Angela Merkel believed the eurozone could survive Greece’s exit.

Eurozone leaders and investors are concerned the anti-euro party Syriza will win a controlling interest in an election and will then attempt to renegotiate its 2011 bailout terms with a write-down of its debts.

Government 10-year yields tumbled 10.3 points to 2.767 per cent and US 10-years dropped 7 points to 2.10 per cent on safe-haven and global deflation fears.

On Friday weaker US, European and UK manufacturing PMI indices compounded the warning signal for global growth coming from the 50 per cent plunge in oil prices since July.

The Shanghai composite index jumped 2.5 per cent at the close of the ASX after Beijing signalled it would make it easier for first time home buyers to enter the housing market with loans of up to $210,000.

In Tokyo the Nikkei index recovered from the red to trade 0.2 per cent up as the yen reversed early strength against the US dollar.

Brent crude oil fell 1.5 per cent to a fresh five-year low of $US55.50 a barrel, spot iron ore was flat at $US71.26 a tonne on Friday and copper fell 0.9 per cent to $US6240 a barrel.

Quay Equities head of trading Tristan K’Nell said the local bourse had started fairly well despite tepid leads from United States markets, but subsequently gave up much of its gains.

Mr K’Nell said volumes were pretty light given that many traders and investors were still away on Christmas holidays.

“People don’t really want to make a lot of moves because we have company reporting season in February,” he said.

“The market is pretty much drifting sideways.”

Mr K’Nell said trading might pick up later in the week, ahead of the release of US jobs figures on Friday.

Oil and gas producer Woodside Petroleum rose 20 cents to $38.33, Santos added seven cents to $8.26, and Oil Search lifted 11 cents to $8.00.

Global miner BHP Billiton fell six cents to $29.48, Rio Tinto firmed 15 cents at $58.48, and iron ore pure-play Fortescue Metals scraped off one cent at $2.82.

Among the major banks, Commonwealth Bank was up 21 cents at $85.95, NAB was five cents richer at $33.61, but Westpac backtracked 11 cents to $33.16, and ANZ eased six cents to $32.17.

The broader All Ordinaries index was up 14.5 points, or 0.27 per cent, at 5429.5 points.

The March share price index futures contract was 13 points higher at 5416 points, with 24,262 contracts traded.

National turnover was 988.9 million securities worth $2.4 billion.