The Australian sharemarket 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.
Insurers, property firms and Telstra were the best performers, while the energy sector reversed its gains from Tuesday.
"Mining shares also slid, despite the repeal of the mining tax, as a strengthening US dollar fed into the commodity complex and lowered prices," CMC Markets chief strategist Michael McCarthy said.
BHP Billiton's fall was also a result of it trading ex-dividend, meaning new buyers are no longer entitled to its latest dividend.
"Other than these two sectors, shares generally marked time or edged higher as fear of missing out trumped fear of losses," Mr McCarthy said.
BHP Billiton lost 70 cents to $36.20, Rio Tinto shed 69 cents to $62.34 and Fortescue Metals was 10 cents weaker at $4.00.
Origin Energy shed 27 cents to $15.85, Woodside was 36 cents lower at $43.31 and Oil Search dropped four cents to $9.68.
Telstra posted a fifth straight day of gains, taking it close to the 13-year high it hit several weeks ago.It added six cents to $5.72.
Insurer Suncorp gained 21 cents to $14.81 and QBE added 16 cents to $11.81, while Westfield Corporation was up 10 cents to $7.78 and the owner of its Australian shopping centres, Scentre, was four cents higher at $3.54.
The big four banks were relatively flat, with National Australia Bank up 22 cents at $35.31, Commonwealth up 20 cents at $81.70, ANZ up six cents at $33.67 and Westpac was five cents higher at $35.22.
The broader All Ordinaries index was down 2.3 points, or 0.04 per cent, at 5,654.6 points.
The September share price index futures contract was three points higher at 5,649 points, with 23,018 contracts traded.
National turnover was 2.2 billion securities worth $4.8 billion.