The S&P/ASX 200 reached an intraday high of 4486.3 points in morning trade, but with mixed European leads and with the New York Stock Exchange ending flat overnight after two days of closure, optimism was nowhere to be seen.

At the closing bell, the index declined 1.3% or 59.4 points to 4457.6 points.

In afternoon trade, investors turned their attention to the release of official Chinese data from the National Bureau of Statistics showing China’s manufacturing sector expanded for the first time in three months.

The Purchasing Managers Index was 50.1 in October, up from 49.8 in September.

Meanwhile, unofficial Chinese data from HSBC Holdings reported the PMI index reaching 49.5 in October, up from 47.9 in September.

With the PMI at an eight-month high, HSBC chief economist and co-head of Asian economic research at HSBC, Hongbin Qu, said China’s industrial activity was continuing to bottom out.

“This is mainly driven by the increase of new orders, thanks to the filtering through of the earlier easing measures, while exports outlook remains challenging,” he said.

The data did little to lift the local miners, with the basic materials sector dropping 1.4%.

Rio Tonto posted a 1.2% loss to close at $A56.25, while rival BHP Billiton dropped 1.3% to $33.82.

Shares in Fortescue Metals Group declined for a second day, closing 2.2% lower at $3.99.

It was a similar situation for other top miners, with Newcrest Mining falling 0.7% to $26.24.



Meanwhile, Ivanhoe Australia lost 10.9% to 78c.

Shares in Arrium took a hit today after its Asian suitors, Steelmakers Australia, walked away from a takeover bid for the miner and steelmaker.

In a statement, SA said there would be no further engagement with Arrium.

Shares in Arrium shed 12.7% to 68.5c.