The Australian share market has ended in the red, driven in large part by a steep drop in BHP's share price.

That's despite global markets ending mostly higher overnight, with the Nasdaq closing at a new high in US trade.

Australia's benchmark ASX 200 share index closed down by 0.6 per cent at 7,485.7 points, off the lows of the session, while the broader All Ordinaries lost 0.4 per cent.

BHP was the major driver of the decline, with the big Australian miner down as it traded without access to its latest bumper $2.71 per share dividend, accounting for most of its $3.09 per share price decline.

The stock closed 6.9 per cent lower at $41.94.

However, further falls in Chinese iron ore futures and spot prices also weighed on BHP and Rio Tinto (-0.7pc).

Despite the weakness in iron ore, the Australian dollar rose 0.2 per cent against the greenback by 4:40pm AEST, to buy around 73.8 US cents.

Elsewhere on the local market, top gainers were Altium (+4.3pc), Clinuvel Pharmaceuticals (+4.2pc) and Polynovo (+3.8pc).

The biggest loser besides BHP was United Malt Group, with shares down 6.1 per cent on the release of its latest results, which missed expectations due to COVID disruptions that reduced beer drinking at venues, especially across Asia.

Gold miners were also weaker, including Regis Resources (-3.6pc), St Barbara (-3.4pc) and Silver Lake Resources (-3.2pc).

However, technology stocks rose after similar moves in the US overnight — shares in Altium, WiseTech Global (+1pc), Seek (+2.1pc) and Carsales (+1.1pc) made gains.

Home loan refinancing at record high

Australians have been taking advantage of low interest rates by switching their home loans more than ever before.

Bureau of Statistics data showed borrower refinancing of loan commitments between lenders reached a new high of $17.2 billion, a rise of 6 per cent in July.

"The value of refinancing between lenders was 60 per cent higher in July 2021 compared to a year ago," ABS head of finance and wealth Katherine Keenan said.

Excluding refinancing, the value of new loan commitments edged higher by 0.2 per cent in the month, as a rise of investor loans was offset by declining owner-occupier loans.

"First home buyer demand fell across the board, down 7.6 per cent nationally for the month, but is still up 36 per cent on a year ago," BIS Oxford Economics economist Maree Kilroy said.

Ms Kilroy has forecast first home buyer activity to continue to wane due to "housing affordability deteriorating" and the end of the HomeBuilder scheme.

Resources exports drive record trade surplus

Separate data from the ABS showed a record trade surplus of $12.1 billion in July.

That was a $1 billion increase from June and ahead of economists' forecasts, led by a jump in resources exports.

NAB economist Taylor Nugent said exports of metal ores and minerals rose in the month, including iron ore.

"Looking forward, the outlook for export values is clouded by the sharp decline in the iron ore price amid concerns about Chinese demand," he said.

Another fall in iron ore prices contributed to losses for London-listed shares in BHP (-1.2pc) and Rio Tinto (-0.9pc) overnight.

Chinese iron ore futures plunged more than 8 per cent, as restrictions on steel output across the country dampened demand for restocking the commodity.

Spot iron ore was down 5.9 per cent to $US143.55 a tonne.

It came as China's factory activity contracted in August for the first time in nearly one and a half years, with COVID-19 containment measures, supply bottlenecks and high raw material prices weighing on output.

Strict lockdown measures in China contained an outbreak of the Delta variant across several provinces last month but also hit economic activity.

However, RBC Capital Markets mining analyst Kaan Peker expects steel demand to pick up this month.

"Construction work is expected to pick up again after the rainy season and the Delta variant," he said.

He noted that iron ore shipments were disappointing in August.

"Most notably, BHP's shipments have been weaker compared with [the same period last year], mostly likely due to port and car dumper maintenance."

Nasdaq hits fresh record as S&P 500 gains

On Wall Street, the major indices posted a mixed finish, with the Dow Jones edging down by 0.1 per cent, while the broader S&P 500 (+0.7pc) and tech-heavy Nasdaq (+0.3) rose.

That saw the Nasdaq set a new record closing level.

Shares in Apple, Facebook, Amazon and Alphabet all made modest gains, while utilities and real estate stocks also rose.

European stocks were mostly higher overnight, with the Euro STOXX 6000 index close to an all-time peak.

The market rally came despite some weaker-than-expected economic data.

In the US, a private payroll survey showed jobs growth well below forecasts in August, but there were still 374,000 jobs added in the month.

A measure of the US manufacturing sector showed activity and orders picking up last month, while employment in the sector dropped to a nine-month low amid labour shortages.

Locally, GDP figures came in ahead of expectations, with Australia's economy expanding 0.7 per cent in the June quarter, meaning a technical recession has been avoided if the economy recovers from the lockdown hit in the final quarter of the year.

"We're in the moment where it's still semi-Goldilocks [for markets] — there is the inflation element that is still for the moment being discarded by central bankers," Unigestion senior portfolio manager Olivier Marciot told Reuters.

"Earnings are very good, macro is very strong and still the central banks are remaining very accommodative."

ABC/Reuters