The Australian sharemarket lost ground as tumbling oil and metal prices revealed the risks from a US interest rate rise and slower Chinese growth.
The overnight lead from Wall Street was a 0.3 per cent gain on Friday, but the S&P/ASX 200 index dropped 0.5 per cent at the opened and closed down 18.3 points, or 0.32 per cent, at 5757.3.
On Friday, key US non-farm payrolls rose 235,000, better than forecasts but not by enough to console markets the US economy was strong enough to easily shrug off a rise in interest rates on Wednesday night.
Brent crude oil tumbled another 2.5 per cent to $US51.10 a barrel as rising US oil production and a jump in global borrowing costs continued to force the unwinding of speculative long oil positions.
The Australian dollar bounced US0.5¢ to $US75.70¢ and government 10-year yields dropped 4.1 points to 2.936 per cent amid profit-taking on US rate rise bets.
The US dollar also weakened ahead of the world’s biggest economy hitting its debt-ceiling on Wednesday.
“In practical terms this won’t mean anything for a couple of months at least with the government having enough cash to operate business as usual without breaching the ceiling (that will be imposed at the prevailing level of debt),” National Australia Bank global head of currency strategy Ray Attrill said.
“That said, indications of the willingness or otherwise of Congressional leaders to support a ‘clean’ lifting of the debt ceiling rather than embroil it in Trump administration fiscal policy ambitions, will be important as a sign of the ease or otherwise within which deficit and debt enhancing budget policy will pass in Congress.”
The Shanghai composite index rallied from the red to a 0.4 per cent gain as the central strengthened the yuan fixing and drained cash from the banking system for the 13th straight session.
Spot iron ore was little changed at $US86.72 a tonne on Friday and Dalian futures were up 1.5 per cent today.