The ASX started 2018 on a softer note on Tuesday, as investors held back from adding to the previous year's gains as they waited for clues on market direction.
The benchmark S&P/ASX 200 index slipped 3 points, or 0.1 per cent, to end the day at 6061, while the All Ordinaries lost 1 point to stand at 6166.
AMP Capital's head of investment strategy Shane Oliver put Tuesday's mildly weaker performance for the ASX down to a weak lead from overseas markets as they closed out the year on Friday.
"It's a hangover from Wall Street and Europe," he said.
The ASX's 7 per cent rise last year was a reasonably good performance, according to Mr Oliver.
"There's a bit of 'where to?' now. I suspect that this year is going to be bit more volatile." He's looking for the ASX to reach 6,300 by the end of 2018.
In contrast to the sharemarket, the Australian dollar had a better day on Tuesday, with the currency up 0.4 per cent at US78.39?? following an upbeat survey of Chinese manufacturing.
The survey was taken as a positive for continued Chinese demand for commodities and miners were some of the best performers in the ASX on Tuesday, with Rio Tinto rising 0.9 per cent to $76.50 and BHP up 0.4 per cent at $29.68.
Some of the most notable performances from the mining sector on Tuesday came from outside the biggest names, however, with Syrah Resources jumping 4.4 per cent to $4.71 and Lynas Corp higher by 2.8 per cent to $2.24.
Gold miners were particularly strong after the precious metal hit a three-month high on Friday, with Newcrest up 1.1 per cent to $23.08
Telecom Telstra also gained, rising 0.8 per cent rise to $3.66 on Tuesday.
Telecoms were some of the worst performers as a sector last year along with utilities, noted Mr Oliver. "Likewise health was at the top last year. It looks like a bit of a reversal of last year's themes which suggests a bit of profit taking."
Healthcare stocks losing ground included CSL, down 0.5 per cent at $140.55 and Ramsay Health Care, down 1.1 per cent at $69.32.
Banks and some of the heavyweight consumer staples stocks also dragged on the benchmark, with ANZ losing 0.7 per cent to $28.58 and Westpac down 0.3 per cent to $31.25.
PIlbara Minerals jumped 5.8 per cent to $1.18 on Tuesday, with the lithium and tantalum producer building on an advance of around 230 per cent since the start of September. Lithium producers have caught the attention of investors considering the investment prospects of renewable energy and electric cars in recent monts. Pilbara Minerals announced toward the end of December that it signed an offtake deal with Global Advanced Metals for the sale of 100,000 pounds of tantalum concentrates from its Pilgangoora Lithium-Tantalum Project in Western Australia over the next two years. It also told shareholders that it remains engaged with buyers in the tantalum market and that pricing is well above previous assumptions.
Oil prices had their highest January opening since 2014 on Tuesday, with Brent and WTI crude prices rising to mid-2015 highs, supported by ongoing supply cuts led by OPEC and Russia as well as strong demand. US West Texas Intermediate crude futures were at $60.64 a barrel, up 22 cents, or 0.4 per cent, after hitting a June 2015 high of $60.68 earlier. Brent crude futures - the international benchmark for oil prices - were at $67.20 a barrel, up 33 cents, or 0.5 per cent, after hitting a May 2015 high of $67.23 a barrel earlier in the day. It was the first time since January 2014 that both crude oil benchmarks opened the year above $60 per barrel.
The Australian dollar traded up 0.4 per cent at US78.39?? after a Caixin survey of Chinese manufacturing which showed a surprise pick-up in activity in December. In addition, a local survey showed that Australia's manufacturing sector is experiencing "marked expansion" in December, driven in part by new business from Asia, New Zealand and Papua New Guinea, a local survey showed. The Commonwealth Bank Manufacturing Purchasing Managers' Index (PMI) rose to 57.1 in December, from 56.3 in November, the highest reading in a year. At the same time, the Australian Industry Group's Australian Performance of Manufacturing Index slid 1.1 points to 56.2 points in December but still stretched its run of either expanding or stable conditions to 15 months.
Sydney house prices could fall up to 10 per cent over the next two years, Corelogic head of research Tim Lawless has predicted. Corelogic's December Home Value Index shows Sydney property values fell 0.9 per cent in December, leading a 0.3 per cent fall nationally in values, as the housing market headed into 2018 with the prospect of "lower to negative growth rates across previously strong markets". The fall in December left national dwelling values up just 4.2 per cent in 2017 (with a median price of $549,000), well below the 5.8 per cent rise in values in 2016 and 9.2 per cent gain in 2015.
Bitcoin is already having a bad year. For the first time since 2015, the cryptocurrency began a new year by tumbling, extending its slide from a record $US19,511 reached on December 18. The virtual coin traded at $US13,150, down 8.1 per cent from Friday, according to data compiled by Bloomberg. That's also a fall from the $US14,156 it hit Sunday, according to coinmarketcap.com, which tracks daily prices.Bitcoin got off to a much stronger start last year, and then kept that momentum going, eventually creating a global frenzy for cryptocurrencies.
According to Rabobank's latest dairy quarterly report the global milk market will "confront a wave of exportable surplus" in coming months, estimated to be 3.2 billion litres higher year-on-year for the six month period from October 2017 to March 2018. "The recent growth in global milk supply, which peaked in the last quarter of 2017 with the Oceania spring peak and a return to growth in Europe, is taking its toll on global commodity prices," Rabobank senior dairy analyst Michael Harvey said. "Supply growth is emerging as the biggest risk for global dairy markets", he added, with the entire dairy complex witnessing weakness.