Aust stocks close lower

Local market narrows early losses, falls on tensions between Ukraine and Russia.

The Australian stock market has closed weaker but narrowed early losses amid tensions between Ukraine and Russia.

At the 1615 AEDT official market close, the benchmark S&P/ASX200 index fell 0.38%, to 5,384.3 points, while the broader All Ordinaries index declined 0.33% to 5,397.4 points.

Despite a raft of local data, the Ukraine situation was the most pressing issue for markets and is likely to trump all other news this week, IG chief market strategist Chris Weston said.

"Invariably many will be buying this dip, but on an index level I would stand aside and wait for clarity to develop as you know this market can go lower, very quickly, if geo-politics deteriorates and United States data doesn’t show any signs of a pick-up," Mr Weston said.

"In uncertain times the buyers will stand aside and the shorts come in in bigger size knowing it’s easy to move markets lower in this environment.

"By early afternoon relative calm had settled in and some modest (and rather brave in my opinion) buying came into the ASX 200, Nikkei and even China markets, while US futures followed suit."

The benchmark fell more than 1% in morning trade, then bounced back after the Chinese market opened in mildly positive territory around noon.

IG market analyst Evan Lucas noted key data releases from China, saying the country "tends to operate on its own accord".

"The services PMI was reasonably good and is still expanding," Mr Lucas said.

"The HSBC final manufacturing read was ever so slightly ahead of the flash numbers, but is still going backwards, which is a dampener, but nothing massively negative."

The Chinese yuan is going backwards for the fifth day in a row, which is positive for the export nation, he said.

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