The Asian sector was mostly subdued, though better-than-expected Chinese GDP data lifted the CSI300, Shanghai Composite, and Hang Seng.
However, the impressive National Bureau of Statistics data did little to shift commodity prices or the Australian dollar – which slipped back below US 77¢.
Burman Invest portfolio manager Julia Lee said Australian markets appeared to be involved in a tug-of-war between expectations of US stimulus and a strong economic recovery.
“If you look at what has happened across the globe, the recovery has been better and stronger than expected,” Ms Lee said.
“So the market is trying to balance this stimulus, which is positive, but also what might happen a few months down the track, including higher interest rates.
“Generally rising interest rates is a positive sign, but I guess you could say there is that risk of central banks raising them too quickly.”
Managing Director of investment firm Djerriwarrh, Mark Freeman, said the outlook for equities remained uncertain, with investment opportunities not as obvious as they might once have been.
“We have got no idea where it’s going to be in 12 months time. Economies could improve and we could start seeing some better earnings growth,” Mr Freeman said.
“People will just crawl over the market and look for something that looks like a half-decent story. It is very difficult to predict where markets are going to go. We just make sure we are in good companies.”
The miners were a major weight on the ASX in the first session of the week, with BHP falling 2.9 per cent to $45.45, Rio Tinto dropping 1.4 per cent to $118.79, and Fortescue Metals down 1.4 per cent to $24.82.
Mineral Resources, South32, and Lynas Rare Earths were also down.
NAB was the worst of the major lenders, dropping 2 per cent to $23.65.
Insurer QBE fell 5.7 per cent to $8.08 after after losing an appeal in the UK courts over business interruption claims.
Afterpay shot up to a new intraday record high $140.40 in early trade before fading. It eventually lost 0.9 per cent to $132.01.
JB Hi-Fi closed at a new peak of $52.70 on a bumper first-half sales update and Pro Medicus continued its stellar run with an 11 per cent gain to a new high of $42.40.
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