Australian shares have dipped again in early trade despite gains by the miners and a positive lead from European markets.
The benchmark S&P/ASX200 index gained as much as 23.2 points before dropping back as investors cashed in.
With the Chinese markets closed for a second straight day, resources companies were the strongest performers.
BHP Billiton was up more than two per cent out of the gate and Fortescue Metals Group showing a similar increase before dropping back amid the selling.
“We’re in the eye of the storm ahead of foreign payrolls and with Chinese markets closed, there’s no pressing negative sentiment,” IG market analyst Angus Nicholson said
“China’s likely to start putting in further fiscal stimulus, so there is quite a lot of support for the iron ore price of late. Once the iron ore price bottomed in July, it’s been ticking up steadily, so that’s solid for mining stocks.”
At 1025 AEST, BHP was up 30 points, or 1.23 per cent, to $24.62, while Rio Tinto gained 36 points, or 0.73 per cent, to $49.63.
Fortescue gave up all its early gains to sit flat at $1.89.
The big four banks were subject to further selling following their turmoil on Thursday, when the quartet dragged the market down after investors sold following early gains.
“The banks have taken a pretty big beating lately,” Nicholson said.
ANZ rose briefly before dropping back to sit 19 cents, or 0.7 per cent, down at $26.77. Commonwealth Bank dropped 62 cents, or 0.86 per cent, to go to $71.35, while NAB was down 32 cents, or 1.07 per cent at $29.61.
Westpac, whose chief executive is on Monday due to issue a strategy update that could involve cost reductions, was the biggest faller in percentage terms, declining 1.23 per cent, or 37 cents, to $29.82.
European markets gained overnight, but US equity markets gave up early gains as investors turned cautious ahead of the August jobs market report, which could weigh heavily the Federal Reserve’s upcoming interest rate decision.
Nicholson said the probability for a September Fed rate rise still sits at 30 per cent.
– AAP
