Australian shares ended the day in the red as major companies traded without the rights to their dividends and following a tech-led sell-off on Wall Street because of rising bond yields.

The Australian share market fell steeply in early trade but came off its lows after new data showed the country made a record trade surplus in January.

The sell-off resumed in the last hour of trade, with the All Ordinaries falling 1.7 per cent, below the key 7,000-point mark.

It recovered some lost ground at the close to finish down nearly 1 per cent, or 67 points, to nearly 7001.

The market was pulled down by blue-chip companies trading ex-dividend, including miners Rio Tinto (-6.2pc) and BHP (-3.1pc), supermarket giant Woolworths (-2.6pc), and vaccine maker CSL (-4.2pc).

The ASX 200 dropped 0.8 per cent, or 57 points, to 6,761.

Most sectors lost ground, including technology firms, with only banks and property holding up.

The financial index reached the highest level in more than a year as all the big four banks rose.

Leading the losses on the ASX 200 were nickel, copper and gold miner IGO (-7.9pc) and online bookmaker Pointsbet (-6.3pc).

Among the gains were ANZ (+3pc), share registry Computershare (+4.6pc) and coal miner Whitehaven Coal (+3.5pc).

Cleanaway Waste Management confirmed it had expressed interest in buying the local business of French waste and water management firm, Suez.

Its shares put on 4 per cent to $2.33.

Myer's JobKeeper profit

Department store Myer saw a 76 per cent rise in after-tax profit to $43 million for the first half of the 2021 financial year, thanks to the JobKeeper wage subsidy and commercial rent waivers.

Investors got no dividend payout for the second year in a row.

Myer said store closures due to the COVID-19 pandemic led to a 13 per cent drop in first-half sales, sending it down 10.6 per cent to nearly $0.30, although online sales surged.

Sales fell to $1.4 billion for the six months to late January as coronavirus restrictions hurt sales in big cities.

Myer's results suggested it had been heavily dependent on government support to keep operations running.

Myer received $51 million as part of the federal government's JobKeeper scheme, and was also granted $18 million in rent waivers related to store closures.

QBE gets a new boss

Major insurer QBE jumped 2.8 per cent to $9.54.

It appointed Andrew Horton, boss of UK specialist insurer Beazley, as the new chief executive following the abrupt departure of Patrick Regan last year, after QBE found he had breached fallen the firm's ethics and conduct standards.

Mr Regan left the firm after a complaint from a female employee.

The Australian dollar recovered lost ground thanks to the record trade surplus and was trading around 78.05 US cents at 4:50pm AEDT.

Spot gold rose 0.4 per cent to $US1,717.82 an ounce, while Brent crude oil was up nearly 1 per cent at $US64.60 a barrel, ahead of tonight's meeting of major oil producers, where OPEC is expected to maintain supply cuts instead of increasing production.

Record trade surplus

Data from the Australian Bureau of Statistics showed the trade surplus rose by just over $3 billion in January to $10.1 billion thanks to booming iron ore prices, which are at a nine-year high.

Export values rose 6.2 per cent while import prices fell 2.3 per cent.

Retail sales increased 0.5 per cent from December to January to $30.5 billion, with turnover up 10.6 per cent over 2020, above pre-COVID spending levels.

Capital Economics said the rise was broad-based, with increases in every state except Queensland, where sales fell 1.5 per cent over the month, because of the brief lockdown in Brisbane.

Wall Street falls as rising bond yields drive tech sell off

Earlier the Nasdaq fell sharply as investors sold big-name tech shares like Microsoft (-2.7pc), Amazon (-2.9pc) and Apple (-2.4pc), all saw big falls.

Facebook lost 1.4 per cent and said it would end its temporary ban on political advertisements in the US.

The ban was introduced ahead of November's US elections to crack down on misinformation and fake news.

It then stopped all political and social-issue ads in the weeks following as Donald Trump publicly fought the outcome.

Facebook allowed some political ads around a Senate run-off in Georgia in early January but blocked all political ads again when rioters attacked the US Congress on January 6.

While tech led the market falls, banks and industrials stocks led the gains on Wall Street as investors turned to sectors likely to benefit from an economic recovery on the back of fiscal stimulus and vaccination programs.

"Today is the perfect encapsulation of the big theme we've been seeing in the past couple of months," Baird investment strategist Ross Mayfield said.

The Federal Reserve reported in its latest Beige Book that the US economic recovery continued at a modest pace over the first weeks of this year, with businesses optimistic about the months to come and demand for housing "robust," but only slow improvement in the job market.

While the vaccine distribution is expected to help the economy, data showed US private employers put on fewer workers than expected in February, suggesting the labour market was struggling to regain speed.

Another report showed US services industry activity unexpectedly slowed last month amid winter storms, while a measure of prices paid by companies for inputs surged to the highest level in more than 12 years.

Returns on bonds rise again

Yields on US 10-year Treasury bonds rose to 1.47 per cent, which put pressure on areas of the market with high valuations, namely tech stocks.

It was still off last week's peak of above 1.61 per cent that roiled stock markets as investors bet on rising inflation.

Rising interest rates disproportionately hurt high-growth tech companies because investors value them based on earnings expected years into the future, and high interest rates hurt the value of future earnings more than the value of earnings made in the short term.

"There is a definite headwind for equity markets if yields go above the 1.5 per cent level with most investors keeping an eye on the pace of yield growth," said Michael Stritch, chief investment officer at BMO Wealth Management.

The Dow Jones Industrial Average lost its gains in late trade and fell by 0.4 per cent to 31,31,270, while the S&P 500 deepened its losses in the last hour of trade to end down 1.3 per cent to 3,820.

The financial and industrial sectors on the S&P 500 both reached record highs during the trading session.

The Nasdaq Composite index dropped 2.7 per cent to 13,998.

Exxon Mobil came off its highs but lll up 0.8 per cent after the oil major unveiled plans to grow dividends and curb spending with forecasts that were less ambitious compared to previous years.

Entertainment firm Disney said it would close at least one-fifth of its stores or 60 stores in North America as it revamps its digital shopping platform.

The company is also considering closing a significant number of shops in Europe, but stores in Japan and China will not be affected.

Disney operates around 300 stores globally.

Its shares fell 0.9 per cent to $US192.26.

In Europe, major indices rose. The FTSE 100 index gained 0.9 per cent to 6,675, the DAX in Germany put on 0.3 per cent to 14,080, and the CAC 40 in Paris rose 0.4 per cent to 5,830.