The Australian sharemarket pared sharp early losses as companies trading ex-dividend sapped upside momentum.
The S&P/ASX 200 index dropped 0.8 per cent at the open as miners were dumped, but it bounced to close down 20.4 points, or 0.35 per cent, at 5784.7 as bargain-hunters moved in.
Rio Tinto fell more than 5 per cent after going ex-div $1.63, while BHP Billiton was off more than 2 per cent as iron ore prices eased.
Growth optimism was hit by a 2.1 per cent fall in December-quarter private capital expenditure, far worse than the forecast drop of 0.5 per cent.
Last night the US S&P 500 index slipped 0.1 per cent as investors were left divided over whether the US Federal Reserve board meeting minutes confirmed the likelihood of a rate rise next month.
AmpGFX strategist Greg Gibbs said they were a “confusing set of minutes that say, on the one hand, many want to raise fairly soon, but on the other, many say there is likely to be ample time to respond if signs of rising inflation pressure emerge”.
The Australian dollar initially weakened before bouncing back to unchanged at US76.90¢, but government 10-year yields dropped 5.3 points to 2.781 per cent.
The euro fell as voter polls showed right-wing parties gaining ground in The Netherlands and German two-year bond yields hit record lows around minus 0.85 per cent as banks hoarded safe-haven assets amid tight liquidity conditions.
The Shanghai composite index was down 0.4 per cent at the close of the ASX as the central reversed the trend of the past five days by draining liquidity from the banking system.
Spot iron ore dropped 0.7 per cent to $US94.30 a tonne and Dalian futures were down one per cent.
“There wasn’t much of an offshore lead overnight in America, and if you have a look at sector breakdown, it’s mainly the materials sector that’s pulling the market down,” Atlantic Pacific Securities client adviser Gary Huxtable said.
“And Rio is really the big drag — it’s ex-dividend today.
“Other than that, the iron ore market has been consolidating after having a pretty strong run there for a good week-and-a-half.”
Rio Tinto dropped 5.45 per cent, BHP Billiton shed 2.7 per cent and Fortescue Metals lost 2.6 per cent.
South32 fell 3.85 per cent as the competition watchdog expressed concern over its proposed $US200 million acquisition of the Metropolitan Colliery in NSW from Peabody Energy.
Investor response to the many company earnings reports on Thursday was mixed.
Qantas gained 5.35 per cent despite a 25 per cent fall in its half-year profit, but investors thought the results demonstrated the airline’s resilience in a competitive market.
Casinos operator Crown surged 7.9 per cent despite a weaker underlying first-half profit, but investors welcomed a $500 million share buyback and the payment of a special dividend.
Hospitals operator Ramsay Health Care backtracked 3.2 per cent despite a 14 per cent rise in half-year profit and an upgrade of its full-year profit growth forecast.
Nine Entertainment surged 7.25 per cent as it made a half-year loss of $237 million, because of another big writedown against its free-to-air TV network.
The Australian dollar was slightly stronger against the US dollar despite the release of data showing a sharper-than-expected fall in business investment in the December quarter.
The Aussie was at 76.99 US cents at 16.30pm AEDT, up from 76.91 US cents on Wednesday.
The broader All Ordinaries index was down 17.6 points, or 0.3 per cent, at 5832.5.
The March SPI200 futures contract was down 12 points at 5758 points, with 27,099 contracts traded
National market turnover was 2.44 billion shares worth $5.82 billion.