The Aussie opened the new trading week with a small loss, this despite a positive finish on Wall Street on Friday night.
Traders were given a rude shock this morning, with the ASX 200 sliding more than 40 points at the start of trading.
However that was followed by a solid recovery, which was surprisingly fuelled by weaker-than-expected manufacturing figures out of China.
The final HSBC China manufacturing PMI slid to an eight month low of 48.0 in March. This compared to an expected 48.1, and 48.5 in the prior month.
The data confirmed the third consecutive month of manufacturing contraction in the world’s second largest economy.
Markets actually reacted positively to the data, which boosted speculation Chinese authorities will outline additional stimulus measures to strengthen economic growth.
The other major economic focus for traders was the RBA interest rate decision. As expected, the RBA left the official cash rate on hold at 2.50%.
The central bank reiterated that the most prudent course is likely to be a period of stability in interest rates.
This last comment came as a relief to some investors, who feared that with the recent strong Aussie economic data, the central bank may have adopted a more hawkish tone.
The miners were primarily responsible for the market’s recovery following the release of the China PMI data. BHP soared 1.6%, Rio Tinto put on 0.5% and Fortescue added 1.1%.
Gold stocks copped another hammering after bullion prices fell on Friday night. Newcrest slid 2.1% and Regis tumbled 4.4%.
In the consumer discretionary sector, Southern Cross Media slumped 7.3% after going ex-dividend.
There was little action in the banking space, with CBA shedding 0.4%, NAB slipping 0.1%, ANZ ending flat and Westpac advancing 0.1%.
The ASX 200 gave up six points (-0.1%), settling at 5389.