The Australian sharemarket pared a modest advance on Wednesday as investors shrugged off the White House’s receptiveness to a trade deal with China amid persistent fears about the global economic outlook.

The S&P/ASX 200 Index finished down 2.8 points – a less than 0.1 per cent fall – to 7758.9 points after slipping into the red in late trading. The All Ordinaries slipped 0.1 per cent as five of the 11 sectors finished in the green.

The White House said US President Donald Trump was open to making a trade deal with China – albeit signalling that it expected Beijing to initiate discussions.

The possibility of a trade deal between the world’s two largest economies did little to settle investor jitters on Wall Street even as results from several US banks, including Citigroup, showed an equity-trading boom and relative consumer confidence.

‘Devil you know’

Bank of America’s monthly fund manager survey cast a gloomy outlook for the economy, putting sentiment at a three-decade low. All three US equity indexes drifted lower and US futures fell, while gold, typically considered a safe haven asset, notched a new record at $US3292.35 an ounce.

On the ASX, banks tussled with losses from energy and mining names. Commonwealth Bank advanced 0.8 per cent to a two-month high at $159.32, and Westpac rose 1.5 per cent to $31.22.

Infinity portfolio manager Dom Mlcek said the uncertain global outlook was driving investors to the domestically-oriented sector.

“Take aside the expensive valuations, I think [the banks] are perceived a bit more like a safe haven,” he said. “It’s about the devil you know: we’ve got a better read-through on the Australian macro environment, versus the big unknowns of tariffs”.

Oil and gas explorers Woodside and Santos drove energy stocks lower, dropping 2.3 per cent to $19.32 and $5.49, respectively. Brent crude fell 1 per cent, nearing $US64 a barrel, after the International Energy Agency slashed its oil demand forecast.

Gold producer Genesis Minerals posted the biggest gain on the ASX 200, jumping 8.4 per cent to set a new record of $4.39.

Stocks in focus

In corporate news, digital payments provider Zip jumped 16.2 per cent to $1.72 after upgrading its full-year earnings guidance.

Rio Tinto slipped 2.7 per cent to $103.37 after its flagship iron ore division made its weakest start to a year in a decade owing to wild weather that will cost $150 million to mitigate.

And Bank of Queensland jumped 5.5 per cent to $6.86 after it forecast a higher earnings margin in the second half and shrugged off uncertainty around the global economic outlook.