Australian shares edged higher on Thursday, as gains in financials and mining stocks were offset by the losses in energy, while persisting gloomy factory activity in China, its largest trading partner, hurt investor sentiment.

The S&P/ASX 200 index ended 0.1% higher at 7,305.3. The benchmark finished August 1.5% lower after rising in July.

Manufacturing activity in China contracted for the fifth straight month in August, and the expansion in services sector lost some momentum.

Meanwhile, investors are also on a watch for a barrage of U.S. data that could add to bets that interest rates have peaked.

“ASX is still struggling, while sentiment has been better this week with the lead of U.S. equities, (though) China remains the elephant in the room,” said Damian Rooney, director of equity sales at Argonaut.

Australian shares end higher as inflation cools more than forecast

ASX200 has been trading sideways in the past five months in the 7,370-7,050 range. “We expect that range to hold for a few more weeks before the ASX200 makes its move,” said Tony Sycamore, market analyst at IG Australia.

Energy stocks led losses, falling 2.7% to its lowest level since June 23. The sub-index was weighed by the fall in Woodside Energy and Whitehaven Coal as both traded ex-dividend.

Financial stocks and miners advanced 0.6% and 0.4%, respectively.

Shares of the Big Four lenders climbed between 0.3% and 1.1%, while global miner BHP rose 0.3%.

In New Zealand, the benchmark S&P/NZX 50 index closed 0.3% higher at 11,554.48.