The Australian sharemarket struggled closed marginally lower after iron ore prices and precious metals tumbled and global borrowing costs ramped higher.
Investors showed little reaction to June-quarter GDP growth of 0.5 per cent that was slightly better than forecast but well short of the export driven 1.1 per cent attained in the March-quarter.
Following the slightly negative lead from Wall Street last night the S&P/ASX 200 index 200 index opened lower, rallied into the black but closed 2.4 points, or 0.04 per cent, down at 5656.1 after regional growth hopes were supported by a bounce in China's services PMI index.
"Record low interest rates are a key tailwind for growth, but the economy remains constrained by a number of headwinds," Westpac economist Andrew Hanlan said. "In particular: a tightening of fiscal policy; a slowing of growth in China, triggering a decline in our terms of trade; a still high currency; and a downturn in mining investment."
US stocks struggled after global benchmark US 10-year yield started to climb early last night, with the bounce accelerating to an 8 point gain to 2.42 per cent after the US ISM manufacturing index climbed 1.9 points to 59, a 10-year high.
The US data was the only bright spot on the global manufacturing front this month, but the news stoked fears the US Federal Reserve will raise interest in the March-quarter next year.
The Australian dollar slipped US0.1Â¢ to US92.78Â¢ as the US dollar consolidated gains against major currencies and precious metals on the firming US yield outlook.
The Shanghai composite index was up one per cent at the close of the ASX after the services PMI rebounded to 54.1 points from the record low of 50 in July.
In Tokyo the Nikkei index was up 0.5 per cent as the weakening yen continued to underpin demands for exporters.
Spot iron ore dropped 0.5 per cent to $US86.70 a tonne yesterday, just a whisper off the lowest level since 2009, while Dalian iron ore futures tumbled 2.2 per cent today.
Copper rose 0.5 per cent to $US6975 a tonne and gold dropped $US10 to a 10-week low of $US1266 an ounce.