Shares in Sydney fall on weak retail sales, trade, Greece talks ahead

Investing.com - Shares in Sydney fell on Thursday after weak trade and retail sales data highlighted difficulty for the economy to transition away from mining-led investment.

The S&P/ASX 200 fell 0.41%, while the Nikkei 225 gained 0.28%. The Shanghai Composite was down 0.29% and the Hang Seng index dropped 1.65%.

Elsewhere, Greece inched closer to striking a deal with its creditors on Wednesday, but talks are heading down to the wire.

Australia however started Asia with downbeat news that the trade balance for April widened to an A$3.9 billion deficit, compared to an A$2.250 billion deficit seen year-on-year.

The figure was the widest trade deficit ever as a result of a 13% fall in exports of metals and mineral ores and a 22% fall in coke, coal and briquettes. The latter was a result of a temporary closing of ports because of weather.

Retail sales came in flat, well below the gain of 0.4% expected month-on-month.

The data may disappoint the Reserve Bank which Tuesday noted an improvement in household spending in its cash-rate statement.

While retail-trade data doesn't give the full picture of household spending GDP data released Wednesday showed household consumption slowed in the first quarter. The RBA is looking for household demand to increase and for that to boost capital expenditure by non-mining companies.

Overnight, U.S. stocks were higher after the close on Wednesday, as gains in the Telecoms, Consumer Services and Industrials sectors led shares higher.

At the close in New York, the Dow Jones Industrial Average added 0.36%, while the S&P 500 index climbed 0.21%, and the NASDAQ Composite index climbed 0.45%.

Also on Wednesday, mixed U.S. economic reports and positive remarks by European Central Bank President Mario Draghi boosted demand for the single currency.

The Institute of Supply Management said its non-manufacturing purchasing manager's index fell to a 13-month low of 55.7 last month, below forecasts for a reading of 57.0 and down from 57.8 in April.

The report came after payroll processing firm ADP said non-farm private employment rose by 201,000 last month, just above expectations for an increase of 200,000.

Separately, the U.S. Bureau of Economic Analysis said that the trade deficit narrowed to $40.88 billion in April from a revised deficit of $50.57 billion in March. Analysts had expected the U.S. trade deficit to narrow to $44.0 billion in April.

ECB President Mario Draghi said the bank's asset purchase programs will continue until the end of September 2016 and "until the path of inflation is consistent with our aim of achieving inflation rates below, but close to, 2%."

Speaking at the central bank's monthly press conference, Draghi also said that the ECB's asset-buying program is contributing to economic growth and that the full implementation of its monetary policy measures will "provide the necessary support to the euro area economy."

The comments came after the ECB held its benchmark interest rate at a record-low 0.05%, in line with market expectations.