The S&P/ASX 200 reached a high of 5441 points early before falling back, eventually clawing four points higher to 5412.
The basic materials sector was one of the market’s worst performers, finishing 0.5% lower.
The midday fall came on the back of new data from the HSBC China Manufacturing Purchasing Managers’ Index, which signalled a bigger than expected slowdown in Chinese manufacturing.
The latest PMI came in at 48.3, a seven-month low, with all indicators moving lower.
“February’s flash reading of the HSBC China Manufacturing PMI moderated further as new orders and production contracted, reflecting the renewed destocking activities,” HSBC co-head of Asian economic research Hongbin Qu said.
“The building-up of disinflationary pressures implies that the underlying momentum for manufacturing growth could be weakening.”
On the local market most mining companies were lower, with BHP Billiton dropping 0.1% to $A38.70 and Rio Tinto down 0.9% to $69.59.
Gold stocks had varying results, with Atlantic Gold up 23.4% to 2.1c, Dacian Gold up 14.7% to 35c and Ausgold up 23.4% to 2.1c.
West African Resources also moved 11.4% higher to 14.5c after purchasing a second-hand heap leach plant with the aim of fast-tracking first gold production in 2015.
Losses from the sector came from Crucible Gold, which dropped 12.5% to 3.5c, while Timpetra Resources lost 13.5% to 9.5c.
Elsewhere, iron ore explorer Nevada Iron fell 11.8% to 75c, but Terramin Australia rose 12.1% to 3.7c.
Rimfire Pacific Mining was also down 10% to 2.7c, and gold and base metals-focused Anglo Australian Resources fell 19.3% to 2.5c.
PanAust was also down 5.4% to $1.88 after releasing its financial results for the 12 months to December.
