The Australian sharemarket closed slightly lower today after iron ore prices fell and US Federal Reserve chairman Janet Yellen kept markets guessing on the US interest rate outlook.
The S&P/ASX 200 index traded in a tight range before closing 10.7 points, or 0.19 per cent, down at 5634.9 as markets faced the dual uncertainty of no major stimulus measures in either the US or China over the next few months.
The Shanghai composite index was per cent in early trade on fears the economic slowdown was hitting profits and new bank lending remained weak but it rallied to trade 0.2 per cent down at the close of the ASX.
In Tokyo the Nikkei index was per cent as the yen continued to weaken.
The US dollar rallied against most major currencies but was steady at US93.15ï¿½ after Dr Yellen came down slightly in favour of the Fed's "hawkish" members expecting rates to begin rising early next year. Government 10-year yields dropped 3.9 points to 3.439 per cent.
National Australia Bank global head of currency strategy Ray Attrill said she mad explicit reference to the possibility that 'increases in the federal funds rate target could come sooner than the Committee currently expects and could be more rapid thereafter'.
"This proved to be a green light for a resumption of US dollar buying and higher US rates at the front end of the (interest rate) yield curve," he said.
Increasing the US dollar's allure European Central Bank president Mario Draghi said ECB quantitative easing would be used "if necessary" and that the euro was expected to weaken further against the greenback.
Spot iron ore tumbled 2 per cent to $US90.10 a tonne on Friday while Dalian iron ore futures dropped 0.4 per cent today.
Copper climbed 0.9 per cent to $US7070 a tonne and gold slipped $US3 to $US1278 an ounce.
The fall in the iron ore price was related to more doubts over the strength of China's economy, following weaker than expected Chinese manufacturing data last week, OptionsXpress market analyst Ben Le Brun said.
"We're modestly down and definitely weighed upon by the materials sector on the falls of the iron ore price over the weekend," he said.
The market had hit a new six-year high on Friday after seven straight trading sessions of gains.
Mr Le Brun described the performance of the rest of the market as "wishy washy", on the back of mixed company earnings reports.
Investors were also digesting a cautious appraisal of the US jobs market by US Federal Reserve chair Janet Yellen, he said.
In the resources sector, BHP Billiton dropped 55 cents to $37.25, Rio Tinto dumped 86 cents to $64.54 and Fortescue Metals dipped eight cents to $4.34, according to preliminary closing figures.
The banks also dropped, with Commonwealth Bank losing 10 cents to $80.51, ANZ retreated 25 cents to $33.22, Westpac shed nine cents to $34.80 and National Australia Bank gave up six cents to $34.40.BlueScope Steel plunged 78 cents, or 12.8 per cent, to $5.32 after reporting a $82.4 million annual loss.
Fuel supplier Caltex surged $1.90, or 7.4 per cent, to $27.45 after it said it would cut 350 jobs in a restructure and lifted its first half profit one per cent to $173 million.
The broader All Ordinaries index was down 7.7 points, or 0.14 per cent, at 5,632.8 points.
The September share price index futures contract was down 13 points at 5,596 points, with 18,946 contracts traded.
Preliminary national turnover was 1.56 billion securities worth $3.66 billion.