Market ends winning streak
The Australian sharemarket narrowly ended its winning streak after oil prices resumed falling, the European Central Bank dispelled rumours it planned to buy corporate bonds and China produced underwhelming PMI manufacturing data.
Following the 0.9 per cent drop in the US S&P 500 last night the S&P/ASX 200 index closed down 2.8 points, or 0.05 per cent, at 5383.1 on below average volume again as steel and iron or futures tumbled.
There was no spot price for iron ore because of holiday in Singapore yesterday but Dalian iron ore futures slumped 3.4 per cent today and steel rebar futures fell another 1.3 per cent.
Copper dropped 0.4 per cent to $US6610 a tonne and gold slipped $US4 to $US1242 an ounce.
The HSBC China flash PMI index edged 0.2 points up to 50.4, barely out of the contraction zone, but the "output" component fell sharply while remaining in the expansion zone and inventories began to rise.
HSBC economist Hongbin Qu said "domestic as well as external demand showed some signs of slowing" although both remained in expansion territory.
"Disinflationary pressures intensified, as both the input and output price indices declined further," he said. "Meanwhile both employment and inventory indices improved. While the manufacturing sector likely stabilized in October, the economy continues to show signs of insufficient effective demand."
The Shanghai composite index was off 0.8 per cent at the close of the ASX.
In Tokyo the Nikkei index was down 0.5 per cent.
Market jitters resurfaced after Brent crude oil fell 2.7 per cent to $US84.50 a barrel and the US West Texas intermediate crude hit a 27-month low as US crude supples surged 7.1 million barrels, double analyst forecasts.
Goldman Sachs strategists noted that "oil prices are a proxy for global growth".
The Australian dollar slipped US0.3¢ to US87.50¢ and government 10-year yields eased 1.2 points to 3.251 per cent.
Market attention is now on the European bank stress test results this weekend for an indication of the health of the eurozone financial system.
Morgans client adviser Luke McElwaine said the big banks had rallied on the prospect of good dividends, while resources companies remained under pressure.
"ANZ, NAB and Westpac are performing after being oversold, going into a dividend," Mr McElwaine said.
"They're the big movers in the market and everything else is looking pretty much down."
He said some foreign investors were sitting on the sidelines until the Australian dollar showed some direction.
"The reason the market is ebbing and flowing is there's probably two schools of thought on where the Aussie dollar's going," he said.
Australia's big mining companies suffered the biggest losses, with BHP Billiton 63 cents, or 1.8 per cent weaker, at $33.64, as Rio Tinto shed $1.34, or 2.2 per cent, to $59.87 and Fortescue Metals lost 13 cents to $3.53.
But the banks all finished in positive territory, with the Commonwealth Bank adding 60 cents to $78.17, Westpac gaining 28 cents to $34.02, National Australia Bank adding 19 cents to $34.04 and ANZ adding five cents to $32.93.
Troubled mining services firm Boart Longyear added eight cents, or 53 per cent, to 23 cents after securing a complex recapitalisation deal with US private group Centerbridge.
Oil Search lost 12 cents, or 1.38 per cent, to $8.60, despite its promise to increase dividend payments to shareholders after lifting production 81 per cent during the September quarter.
Toll Holdings dropped 7.1 per cent to $5.47 after the release of its annual report.
The broader All Ordinaries index was down 3.4 points, or 0.06 per cent, at 5,369.9, according to preliminary figures.
The December share price index futures contract was seven points lower at 5,370, with 24,913 contracts traded.
National turnover was 1.6 billion securities worth $3.8 billion.
