The ASX hovered near 13-month highs as inflation and Covid worries capped buying interest.
The S&P/ASX 200 nudged up two points or 0.03 per cent by mid-session. The advance pared two days of modest losses since Thursday's pandemic-era peak.
A largely patternless morning saw gains in Afterpay, Goodman, Newcrest and some of the banks tempered by declines in Telstra, BHP and Rio Tinto.
What's driving the market
Equity markets have lost momentum over the last week as Wall Street slipped into care and maintenance ahead of a new corporate earnings season and tonight's consumer inflation report. Overnight, the S&P 500 dipped 0.02 per cent, continuing a run of lacklustre sessions.
The US benchmark has not moved more than 1 per cent in five sessions, pulling the VIX or Volatility Index to its lowest level in more than a year. Investors have been reluctant to add to positions until they see how fast inflation is rising and how well corporate profits have rebounded. Simmering concerns about rising Covid rates in several parts of the world compounded the cautious mood.
"Further research on China's Sinovac vaccine being used in Brazil suggested an efficacy result of just above 50%, raising some alarm bells in China and across a number of countries using the vaccine. This can only suggest a longer period ahead to bring the virus under control across much of the developing world," NAB Head of FX Strategy, Ray Attrill, said.
"The weekly death toll in the US rose for the first time since February and the infection rate climbed for a fourth straight week. Infection and death rates across India continue to rise at an alarming rate. India’s key share market index saw its gains for the year wiped out yesterday with a 3½% fall."
The domestic outlook has been clouded by the glacial pace of the national vaccination program. However, this morning's economic data suggested investors were more wary than the average person. Consumer confidence jumped last week to its highest level since 2019. The ANZ-Roy Morgan consumer sentiment gauge climbed 6.4 points to 114.1 after Greater Brisbane emerged from lockdown and New Zealand opened its doors to Australian travellers.
"The receding of the Brisbane lockdown and announcement of the Trans-Tasman travel bubble has seen confidence jump sharply, to above its long-run average and the highest level since late 2019. The jump has occurred despite the delay in the COVID-19 vaccine rollout," ANZ Head of Australian Economists, David Plank, said.
A separate survey showed business conditions also improved. The NAB March conditions measure jumped eight points to an all-time high. Confidence eased three points but remained elevated by long-term standards.
A bright morning for the BNPL sector saw market leader Afterpay rise 3 per cent to a six-week high. Z1P Co surged 9.6 per cent on record quarterly revenue and strong growth in its US business. Splitit also jumped 9.6 per cent on news it will partner with a division of China's UnionPay to offer Chinese customers its instalment payment platform.
The market's sideways drift was underlined by the heavyweight financial and materials sectors. Some banks and miners rose, some fell. Newcrest gained 0.7 per cent, CBA 0.4 per cent, Fortescue Metals 0.2 per cent and ANZ 0.1 per cent. Rio Tinto and BHP declined 0.8 per cent, Westpac 0.2 per cent and NAB less than 0.1 per cent.
Other heavyweight gains included Goodman +0.8 per cent, Macquarie +0.1 per cent and Woolworths less than 0.1 per cent.
Waste manager Cleanaway overcame early weakness after its bid to acquire French rival Suez Group's Australian assets was thwarted by a takeover. Cleanaway announced Suez had accepted a takeover offer from Veolia. Cleanaway said it still hoped to acquire a collection of Suez's Sydney assets for $501 million. The Australian company's share price edged up 1.8 per cent. Rival Bingo Industries jumped 9.1 per cent.
IGO climbed 2.3 per cent after announcing Regis Resources will buy its 30 per cent interest in the Tropicana gold mine for $903 million. The sale furthers IGO's transition to a pure battery minerals producer. Regis shares entered a trading halt while it raised capital for the purchase.
The utilities sector led the selling as the yield on ten-year Australian bonds climbed three basis points. AGL sagged 0.9 per cent, AusNet 1.6 per cent and APA Group 1.5 per cent.
Falls of 0.7 per cent in Transurban and 1.7 per cent in Sydney Airport helped pull the industrial sector lower. Brambles dipped 0.5 per cent. Telstra reversed 1 per cent from yesterday's eight-month high.
Energy companies shrugged off a modest overnight uptick in crude following a Houthi rebel attack on Saudi Aramco facilities. Woodside and Oil Search retreated 0.6 per cent. Beach Energy shed 2.1 per cent. Santos edged up 0.2 per cent.
US futures were broadly flat despite a positive morning on Asian markets. The Asia Dow put on 0.74 per cent. China's Shanghai Composite added 0.27 per cent, Hong Kong's Hang Seng 1.3 per cent and Japan's Nikkei 1.15 per cent.
S&P 500 futures inched up less than two points or 0.1 per cent. Dow futures gained 22 points or less than 0.1 per cent.
Oil added to last night's 33-cent gain. Brent crude rose 16 cents or 0.25 per cent to US$63.44 a barrel.
Gold bounced $2.50 or 0.1 per cent to US$1,735.20 an ounce.
The dollar faded 0.16 per cent to 76.15 US cents.