The share market trimmed three days of gains but finished well off its low as defensive and growth stocks advanced and the banks trimmed their losses.
The S&P/ASX 200 cut a 58-point opening tumble to a final loss of 20 points or 0.27 per cent. The partial recovery kept the index ten points ahead for the week despite the end of a three-session winning run.
The index pared its fall as CSL, Afterpay and Goodman added to gains and the banks turned mixed. Bulk metal producers fell with iron ore prices.
What moved the market
The market had more reasons to retreat than rally this session. US stocks fell for the sixth time in seven sessions overnight, Chinese economic data disappointed, falling bond yields weighed on the banks and a ten-month low in ore prices dragged on the miners. Despite all the headwinds, the index finished 38 points off its low.
Defensive stocks that attract institutional fund flows when bond yields decline provided a welcome cushion. The healthcare sector firmed 1.2 per cent as Cochlear added 2.05 per cent, ResMed 1.79 per cent and CSL 1.4 per cent.
The lithium frenzy showed no signs of waning. Pilbara Minerals climbed 8.41 per cent to a record. Orocobre also hit fresh highs before trimming its advance to 2.3 per cent.
Uranium stocks added to this week's bumper gains. Bannnerman Energy firmed 22.58 per cent, Vimy Resources 14.29 per cent, Boss Energy 10.71 per cent and Paladin 7.89 per cent.
"Lithium and uranium are faring as the two hottest metals in the commodity market," Kalkine Group CEO Kunal Sawhney said. "While lithium chemical prices are surging in double digits in percentage terms on a weekly basis, uranium spot prices are also breaking records.
"It is yet to be seen if these commodities can sustain the current momentum into next year, given that their demand-supply fundamentals have not significantly changed over the recent months."
The early down-pressure followed a losing night on Wall Street. The major indices resumed their September downtrend after a brief relief rally on Monday night. The S&P 500 gave up 0.57 per cent and the Dow 0.84 per cent.
The August Chinese economic update came in weaker than expected. Retail sales grew just 2.5 per cent from August 2020, compared to growth of 8.5 per cent in July. Industrial production also missed expectations, easing to 5.3 per cent from 6.4 per cent in July.
Back home, consumer confidence rose this month as rising vaccination rates boosted reopening hopes. The Westpac-Melbourne Institute sentiment index improved 2 per cent to 106.2 from 104.1 last month.
The session's other top performers were for the most part a mix of growth and defensive stocks, groups that attract funds when yields decline. Elders put on 4.69 per cent, Seven West Media 3.35 per cent, Breville 3.45 per cent, WiseTech 3.21 per cent and Stockland 2.86 per cent.
At the heavyweight end of the market, Afterpay gained 1.16 per cent, Transurban 0.43 per cent, Goodman 0.8 per cent and Woolworths 0.1 per cent.
Gold stocks improved as the session matured. Perseus firmed 3.67 per cent, Westgold 2.29 per cent and Newcrest 0.45 per cent.
The major banks finished mixed but well off their lows despite a sharp contraction in bond yields. The yield on ten-year Australian government bonds declined four basis points to an eight-session low.
Westpac gained 0.27 per cent. CBA cut its fall to 0.17 per cent, ANZ 0.36 per cent and NAB 0.32 per cent.
Telecom Uniti bounced 0.26 per cent after announcing executive director Vaughan Bowen will stay in his role with the company until charges of insider trading relating to a previous role are resolved. ASIC filed two charges yesterday alleging Mr Bowen had inside knowledge when he sold 5.6 million shares in Vocus Group a day before EQT Infrastructure withdrew a takeover offer. Uniti said Mr Bowen denies the allegations and will vigorously defend the matter.
The speculative end of the market has been untouched by recent weakness at the top end, setting new highs for much of the last three weeks. The S&P/ASX Emerging Companies Index rallied 1.35 per cent to a record. The Small Ords edged up 0.16 per cent.
BHP gave up 3.52 per cent after outlining details of its venture into Canadian potash. The Jansen project is expected to turn into one of the world's largest potash operations, capitalising on demand for environmentally-sensitive fertilisers.
A ten-month low in iron ore prices drove Rio Tinto down 1.9 per cent and Fortescue Metals 1.44 per cent.
The energy sector switched from tailwind to headwind despite a steady night on crude markets. Beach Energy dropped 4.04 per cent, Santos 3.54 per cent and Woodside 1.35 per cent.
AGL Energy's brief recovery yesterday was obliterated by a 7.44 per cent slump to a near-decade low. Rival Origin dipped 3.49 per cent.
Brambles sagged another 2.14 per cent in the wake of yesterday's poorly-received investor update. Other drags at the top end included Coles -1.45 per cent, Telstra -0.76 per cent and Wesfarmers -0.18 per cent.
Mastermyne fell 18.1 per cent on news mining operations had been suspended while authorities investigate the death of an employee at the Crinium coal mine in Queensland. Mastermyne had been contracted by owner Sojitc to operate the mine for seven years.
Among companies going ex-dividend, Cimic shed 3.78 per cent and Regis Healthcare 8.68 per cent. Pro-Pac bounced 2.22 per cent, Costa Group 2.51 per cent and Lovisa 0.26 per cent.
A downbeat session on Asian markets saw the Asia Dow shed 1.09 per cent, China's Shanghai Composite 0.24 per cent, Hong Kong's Hang Seng 1.48 per cent and Japan's Nikkei 0.43 per cent.
US futures were cautiously positive. S&P 500 futures firmed five points or 0.1 per cent.
Oil had a third straight rise in its sights. Brent crude rallied 57 US cents or 0.77 per cent to US$74.17 a barrel.
Gold dropped US$2.90 or 0.16 per cent to US$1,804.20 an ounce.
The dollar edged up 0.06 per cent to 73.19 US cents.