THE S&P/ASX200 has turned down 0.1 per cent to 4966.6, paring a 0.4 per cent rise that followed overseas gains on stronger US economic data.
The reversal comes as investors react to higher US bond yields, a falling Australian dollar, and Goldman Sachs' decision to upgrade miners from underweight to overweight, and downgrade banks from overweight to underweight.
Among high-yield plays, the four major banks and Telstra are down between 0.8 per cent and 1.1 per cent.
In the mining sector, BHP, Rio Tinto are up between 0.6 per cent and 1.7 per cent.
Non-resources overseas income earners including CSL, News Corp, QBE and Brambles are up between 1.1 per cent and 4.1 per cent.
But while the stronger Aussie dollar is supporting Australian shares for now, analysts remain cautious about commodity prices after iron ore fell 2.6 per cent amid concern about China's economy.
"The weaker Australian dollar is a double-edged sword because while it's good for offshore earnings, it's mainly occurring because of a rising US dollar, which is negative for commodity prices," IG market analyst Stan Shamu said.
"There are also lingering jitters about China after disappointing economic data recently."
