Weak services activity and company operating profits compounded soft overseas leads and companies trading ex-dividend to push Australian shares lower this morning.
At lunchtime the ASX 200 was off 15 points or 0.35% at 4258 as modest gains in defensive sectors were outweighed by falls among resource stocks and financials. IT +0.8% was the pick of the risers, followed by utilities +0.7% and health +0.5%.
"Investors are waiting for the next catalyst before committing to fresh positions," IG Markets strategist Stan Shamu told Fairfax.
The declines followed a morning of mixed economic news as services activity and company operating profits reported their biggest falls in nearly three years. The AiG/CBA Performance of Services Index fell 5.2 points - its largest fall since July 2009 - to 46.7 points last month. Company operating profits fell 6.5% last quarter, which some analysts attributed to seasonal factors.
Other reports were more optimistic. Sales of new vehicles increased by 6% last month, compared with February 2011. Consumer inflation edged up 0.1% in February but the 2% annual rate remained at to the lower limit of the Reserve Bank's 2-3% target range.
Asian markets were mixed. Japan's Nikkei fell 0.13%, Shanghai added 0.26% and Hong Kong's Hang Seng fell 0.14%. Dow futures were recently off three points or less than 0.1%.
Crude oil futures jumped 64 cents this morning to US$107.14 a barrel. Spot gold was $1.80 stronger at US$1,714.20 an ounce. The dollar was buying US$1.073.
Asian markets aren't as gloomy as ours - just might drag us along this afternoon. Been an ordinary morning at this trading desk. Got into BBG too soon and took a quick stop-loss. Buying PEK on Friday wasn't a great idea, either. Small bounce-win in AQQ. Placed plenty of buy orders but no other hits yet.
