The ASX shook off a solid lead from Wall Street on Friday, and a positive ASX SPI futures number to finish the first day of the trading week in the red.

The S&P ASX 200 (Index: ^AXJO) (ASX: XJO) and the All Ordinaries (Index: ^AORD) (ASX: XAO) both ended down 0.3%, at 4,352.4 and 4,430.3 points, respectively.

Dominating today’s headlines was the Producer Price Index (PPI), the inflation gauge for products purchased by industry. The PPI was down for the first time in two years, dropping 0.3% for the March quarter.

The market saw the decline as further support for a cut in the Reserve Bank of Australia’s (RBA) official cash rate, believing the decline is likely to be mirrored in soft consumer inflation numbers due out next week.

The minutes from the RBA’s last meeting suggested that the bank would be carefully watching the CPI numbers as a key input into the next rates decision, with a low CPI expected to give the RBA room to cut rates.

Meanwhile, ASX biotech Biota (ASX: BTA) agreed to a merger proposal from US-based Nabi Pharmaceuticals that will see Biota leave the ASX for the bigger (and the company says more biotech-friendly) Nasdaq exchange, while both Paladin (ASX: PDN) and Ainsworth Game Technology (ASX: AGI) were the two latest companies to jump on the equity raising bandwagon, with plans to raise US$220m and $44m respectively.

Back on the markets, only the Telecomms and Financials (ex-Property) sectors saw gains, with Information Technology (down 0.9%), Health Care (down 0.8%) and Energy (off 0.8%) leading the losses.

Only 1 in 4 ASX 200 companies saw gains on the day, led by Senex Energy (ASX: SXY) which closed up 4.5%, and Alacer Gold (ASX: AQG), up 4.3%. Other notable gainers included Dart Energy (ASX: DTE), which gained 3.3%, Discovery Metals (ASX: DML), which put on 3.2% and Spotless Group (ASX: SPT), up 2.5%

Of the two-thirds of ASX 200 components to lose value, Resolute Mining (ASX: RSG) was the largest loser, off 5.2%, while Mount Gibson Iron (ASX: MGX) lost 4% and Ramelius Resources (ASX: RMS), Imdex (ASX: IMD), Panoramic Resources (ASX: PAN), Aquila Resources (ASX: AQA) and Gryphon Minerals (ASX: GRY) and 6 others lost more than 3%.

After losing almost one-quarter of one per cent (24 basis points for those with a preference for analyst-speak) after the PPI numbers were released, the Australian dollar was trading at 103.13 US cents, down two-thirds of a cent, in late afternoon trade.

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