Market ends week in the red
The Australian sharemarket pared yesterday's bounce as economic data in the world's two biggest economies pointed to further domestic growth headwinds.
Last night Wall Street shrugged off poor retail sales data with a 1.2 per cent gain because it soothed US rate rise fears, but the S&P/ASX 200 index dropped 35.7 points, or 0.61 per cent, to 5814.5 with losses across the board.
A minor retreat in the US dollar last night failed to ease global market caution, and domestic stocks slipped towards the day's lows along with renewed weakness in the Australian dollar.
The dollar hit a high of US77.10�, US1.5� off its six-year low reached yesterday, but it slipped to US76.70� as greenback selling abated. Government 10-year yields rose 3.8 points to 2.551 per cent while US 10-years slipped 2 points to 2.12 per cent
"We expected this dynamic of an explosive gain in the USD, followed by a bloody correction to be repeated multiple times as we edge toward a Fed Funds Rate lift-off," National Australia Bank strategist Raiko Sharif said.
"A sizeable community of investors have yet to join the USD party. Those sitting on the edge tend to jump on board on the momentum of strong moves, only to be quick jump back out as that rally runs out of steam."
US rate rise fears eased after US February retail sales fell 0.6 per cent, with declines in all categories except petrol.
The Shanghai composite index halved early gains to sit 0.4 per cent up at the close of the ASX following mixed lending data out yesterday afternoon.
Sentiment was supported by comments from Peoples Bank of China governor Zhou Xiaochuan that he disagreed with the view that credit funds flowing to the equity market weren't helpful to economic growth.
In Tokyo the Nikkei index jumped 1.5 per cent.
Spot iron ore rose 0.6 per cent to 4US57.97 a tonne yesterday and Dalian iron ore futures were up 0.6 per cent today.
Brent crude oil fell $US1.70 to $US57 a barrel and gold eased $US4 to $US1159 an ounce.
More to come…
