Better-than-expected US inflation figures has kept Australian shares basically flat, with growing concerns about the debt ceiling.
Australian shares have closed down slightly again after softer-than-expected US inflation data helped improve risk sentiment.
The benchmark S&P/ASX200 index on Thursday finished down 3.8 points, or 0.05 per cent, to 7,251.
The broader All Ordinaries fell 2.6 points, or 0.03 per cent, to 7,449.
The dip came after overnight inflation data revealed the price of goods and services in the US rose 4.9 per cent in the 12 months to April. Though remaining high, the annual rate of inflation has been dropping since hitting a 40-year high of 9.1 per cent last June.
IG market analyst Tony Sycamore says the muted response from the market is a surprise.
"This is because the markets were on tenterhooks waiting to see that the CPI number wasn't going to be hotter than expected," he told AAP.
"Maybe now, it is the concern around the debt ceiling or the X-date as it's called, which is the actual day where the US government can't pay its bills.
"If the US government was to fold, it'd be an extremely apocalyptic moment for the market.
"So my feeling is that the reason that the reaction has been muted is because this day is starting to come."
The ASX's 11 sectors were a mixed bag, with information technology experiencing the biggest gain, up by 1.4 per cent.
Wisetech Global rose by 3 per cent to $70.21, Xero gained 1 per cent to $93.16 and Nextdc climbed 1.9 per cent to $12.
Weighing down the market were the materials and utilities sectors, which fell by 0.5 per cent and 1.1 per cent, respectively.
In the materials sector, lithium producer Allkem experienced one of the biggest wins after its $15 billion merger announcement.
The Brisbane-headquartered company, which is focused on lithium production in Argentina, has agreed to an all-stock merger with the New York Stock Exchange-listed Livent.
Existing Allkem shareholders would own 56 per cent of the combined company, which at recent stock prices would be worth $US10.6 billion ($A15.7 billion).
Allkem finished up 15.7 per cent to $14.94, but other mining companies were not having as good a day.
BHP fell by 1 per cent to $44 and Rio Tinto dropped 1.7 per cent to $109.01.
Looking forward, the Bank of England on Thursday night, Australia time, will announce whether it is hiking interest rates.
"There's no sign of respite in England, like there is in the US, so our gut feeling is that the bank will need to raise rates again, but how they signal that tonight remains to be seen," Mr Sycamore said.
"Interest rates are widely expected to raise by 25 basis points to 4.5 per cent."
The Australian dollar was buying 67.68 US cents, from 67.66 US cents at Wednesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Thursday finished down 3.8 points, or 0.05 per cent, to 7,251.
* The broader All Ordinaries finished down 2.6 points, or 0.03 per cent, to 7,449.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 67.68 US cents, from 67.66 US cents at Wednesday's ASX close
* 90.69 Japanese yen, from 91.59 Japanese yen
* 61.71 Euro cents, from 61.68 Euro cents
* 53.62 British pence, from 53.60 British pence
* 106.24 NZ cents, from 106.65 NZ cents
