Oz investors holding back

The Australian sharemarket closed lower yesterday with investors opting to stay on the sidelines because of ongoing economic uncertainty.

The benchmark S&P/ASX200 index was down 21.5 points, or 0.5 per cent, at 4254.6, while the broader All Ordinaries index was down 21.9 points, or 0.51 per cent, at 4277.8. On the Sydney Futures Exchange, the September share price index contract was down 29 points at 4235 points on turnover of 32,587 contracts.

CMC Markets senior dealer Rob Mulcahy said the market defied a modestly positive lead from Wall St because of uncertainty caused by continuing disappointing economic data coming out of the United States.

"Turnover remains relatively low on the market as investors take stock," he said. "It's just not the sort of environment investors feel at ease with."

Local falls were in line with Asian markets.

IG Markets strategist Ben Potter said the lower volumes made movements on the market very fickle.

"The market seems a bit more bullish than what it was a few days ago," he said. "Nonetheless, everybody is waiting for positive signs to emerge from the upcoming US second-quarter earnings season before they look to put money to work."

Gains among the major mining stocks were offset by losses in the banking sector. BHP Billiton added A28c to A$37.43 and Rio Tinto gained A74c to A$65.84. National Australia Bank shed A31c to A$23.09, Westpac lost A16c to A$21.25, Commonwealth Bank dropped A64c to A$48.25 and ANZ finished A28c lower at A$21.23.

One of the day's best performers was drug maker and distributor Sigma Pharmaceuticals. Its shares gained A5.5c, or 13.9 per cent, to A45c after it got a A$648 million formal takeover proposal from the Aspen Pharmacare.

The gold miners all fell as the precious metal's value dropped below US$1200 an ounce in New York trade overnight. Newcrest Mining dropped A68c, or 1.99 per cent, to A$33.48 and Lihir Gold slipped A8c, or 1.9 per cent, to A$4.13.

- AAP