The sharemarket finished in the red for the second successive day, pulled down by three of the big four banks and Telstra as profit-taking offset early gains from a strong Wall Street lead.
The All Ordinaries finished 0.2 per cent lower at 5714.60, while the ASX200 was down 0.2 per cent to 5713.10.
On Asian markets, Chinese stocks suffered their biggest slump in four months after several major brokerages tightened requirements on margin financing, triggering fears of further measures by regulators to reduce leverage in the red-hot market.
The Shanghai Composite dropped 6.5 per cent to close at 4620.27, after earlier in the day rising nearly 1 per cent, extending a rally that has been fuelled by record growth in margin debt.
At least three Chinese brokerages said they would tighten margin requirements, following similar moves earlier in the week by two other brokers. Regulators also urged lenders to report their investment in stocks, the Shanghai Securities News reported.
Meanwhile, Japan's Nikkei rose for a 10th day, its longest winning streak in 27 years, as investors hoped exporters' earnings will rise after the US dollar hit its highest against the yen since December 2002.
The Nikkei 225 ended 0.4 per cent higher to 20,551.46, another 15-year high. The US dollar soared as high as ¥124.30 on expectations the US Federal Reserve will raise interest rates later this year.
The local market had opened on a positive note as the US Nasdaq technology index closed 1.5 per cent higher to a record finish and the Dow Jones rebounded 0.7 per cent. But the ASX200 soon fell into negative territory and spent the rest of the day trying to claw its way back.
"The market's had a good run recently and I just think it was a bit of profit-taking today," said Equity Trustees' head of asset management Paul Kasian. "There's nothing untoward there – the banks were a bit off, the resources were a bit off. Resources were probably weighing most on the market."
Dreadful business investment numbers released during the morning "highlight that the transition from resource infrastructure spending to the rest of the economy is not going well at all," he said. "It's confirmed to the market that the transition is difficult. Anyone who was thinking of rotating into domestic cyclical stocks is thinking they might hold back a little bit."
Business investment fell by 4.4 per cent in the March quarter, far worse than economists' forecasts of a 2.4 per cent fall. Even worse, in the 2015-16 financial year businesses expect to invest $104 billion, a whopping 24.6 per cent lower than the corresponding estimate made for 2014-15.
Mixed bag for miners
The miners ended mixed with Rio Tinto adding 0.6 per cent to $57.65, while BHP fell 0.5 per cent to $29.20 and BHP spin-off South32 lost 3.1 per cent to finish at $2.18.
Fortescue Metals Group jumped 3 per cent to $2.43 after chairman Andrew Forrest stated he had no interest in selling down his 33 per cent share in the company, while also affirming the miner would not issue new shares unless the price reflects the company's high underlying asset value.
Fellow pureplay iron ore miner Arrium also enjoyed a good day, lifting 2.9 per cent to 17.5¢.
Among the banks, ANZ lifted 0.6 per cent to $32.72, but Commonwealth Bank dropped 0.7 per cent to $83.50, National Australia Bank gave up 0.3 per cent to $33.44 and Westpac retreated 0.2 per cent to $33.12.
Telstra had a bad day, losing 1 per cent to $6.15.
Gold stocks sank as the precious metal's price hovered at a two-week low, with Newcrest diving 5.4 per cent to $13.90 and Regis falling 1.7 per cent to $1.18.
Southern Cross Media tumbled 1.4 per cent to $1.06 after former Ten Network boss Grant Blackley was hired as chief executive.
Analysts pondered whether a proposed directive by Norway's parliament for the nation's $US900 billion ($1.16 billion) sovereign wealth fund to sell out of coal stocks could affect Australian companies – both coal miners and utilities. Investors at Whitehaven Coal weren't worried, with the stock adding 1.7 per cent to $1.45. AGL investors didn't seem too fazed either, with shares closing up 0.1 per cent to $16.13.
Among consumer stocks, Woolworths rose 0.2 per cent to $28.01 while Wesfarmers lifted 0.4 per cent to $43.60.
Energy stocks were also sold off after oil prices dropped overnight. Woodside retreated 0.6 per cent to $36.42 and Santos lost 0.7 per cent to $8.17. Oil Search had a better day, lifting 0.3 per cent to $7.46.
