The Australian sharemarket closed in the red after Commonwealth Bank’s earnings report failed to spark demand for the major banks and data showed Chinese new lending plunged to a six-year low last month.
However, bargain hunters lifted the S&P/ASX 200 index off the day’s lows and the index closed 15.6 points, or 0.28 per cent, down at 5514.7.
The Shanghai composite index initially rallied on the weak lending data but reversed to trade 0.6 per cent downat the close of the ASX after bank new yuan loans dived per cent to 385 billion yuan ($67 billion) from 780 billion yuan.
Instead of reaching a record high for July as expected, the broader aggregate financing total plunged from 1.97 trillion yuan in June to just 273 billion yuan, well short of the expected 1.5 trillion yuan and less than a third of levels prevailing for the past 30-months.
Standard Bank china economist Jeremy Stevens said a number of supportive measures in recent months had given the impression new loans would be materially higher.
“But what seems most likely is that policy has spoken more and done less, which can buoy sentiment and give feeling that cyclical growth story has bottomed whist simultaneously avoiding actually adding additional layers of problems in the economy,” he said.
“As we know, policy makers are walking a fine line of dealing with cyclical sluggishness and facing down large structural imbalances. The degree and allocation of credit is at the heart of this.”
In Tokyo the Nikkei index rose 0.3 per cent after Japanese June-quarter GDP slumped 6.8 per cent, marginally better than the forecast 7 per cent.
The Australian dollar was steady at US92.80¢ while government 10-year yields rose 3.8 points to 3.456 per cent.
Spot iron ore fell 1.3 per cent to $US94 a tonne yesterday while Dalian iron ore futures dropped per cent.
Copper fell 0.8 per cent to $US6940 a tonne and gold rose $US3 to $US1309 an ounce.
Earnings reports from many companies, including biopharmaceutical group CSL, insurer Suncorp, casino owner Echo Entertainment and miner OZ Minerals dominated trade.
Despite posting a record $8.68 billion full year cash profit, Commonwealth Bank shares fell 73 cents to $80.96.
Regardless of the fall, CBA’s performance featured many positives, including a higher dividend for shareholders, CMC Markets chief analyst Ric Spooner said.
"The market finished down overall, one of the driving factor behind that was some selling CBA shares,” Mr Spooner said.
"It was a very solid result but the stock has been priced to perfection and I think some were looking for even better which saw it sold off a bit."
CBA’s rivals were mixed, with ANZ down 14 cents at $32.74, NAB down eight cents at $34.32, and Westpac up 14 cents at $33.72.
The resources sector also weighed on the market, with BHP down 34 cents at $38.24, Rio Tinto down $2.09 at $65.73 and Fortescue 10 cents lower at $4.53.Shares in OZ Minerals fell 19 cents to $4.29 after it posted a $7.4 million half year loss, which was an improvement on the prior year.
Breads and spreads company Goodman Fielder dropped one cent to 63 cents after incurring a full year loss of $405 million.
Among the better performers, CSL beat its own guidance with a full year profit of $US1.31 billion, sending its shares up $1.69 to $67.24.
Suncorp shares gained 37 cents to hit a six-and-a-half year high of $14.49, as it boosted its annual profit by 49 per cent.
Echo Entertainment’s 27 per cent rise in full year profit to $106 million drove its shares 10 cents higher to $3.30.
The broader All Ordinaries index was down 15.6 points, or 0.28 per cent, at 5507.9.
The September share price index futures contract was down 12 points at 5458 with 23,321 contracts traded.
National turnover was 2.1 billion shares worth $5 billion.