Australia shares close at 9-mth low; NZ ends higher

Australia, NZ hit fresh closing peaks on positive global data, trade deal

* Australia Q4 GDP grows 0.5% q/q

* “Big Four” banks lose between 2.5% and 3.7%

* Tech sub-index tracks Wall Street losses, falls most (Updates to close)

By Sameer Manekar

March 4 (Reuters) – Australian shares ended at a nine-month low on Wednesday as investors overlooked faster-than-expected economic growth and a surprise rate cut by the U.S. Fed amid growing fears of a global economic fallout from the coronavirus outbreak.

The S&P/ASX 200 index lost 1.7% to finish at 6,325.40, its lowest since June.

The Australian economy expanded by 0.5% in the last quarter, more than a Reuters poll prediction. However, the growth outlook for the current quarter is overcast with travel restrictions due to the coronavirus outbreak.

“With the economic impact of the coronavirus broadening from the initial tourism impact to supply chain disruptions, extended weakness in Chinese demand and weaker domestic demand, the risk of a recession has increased sharply,” Felicity Emmett, senior economist at ANZ Research, said in a note.

Overnight, the U.S. Federal Reserve in a surprise decision cut rates by half percentage point, but failed to lift investor confidence, sending all three major U.S. indexes down nearly 3%.

In Australia, the heavyweight financials sub-index led the declines, finishing in the red for an eighth consecutive session, with all the “Big Four” banks losing between 2.5% and 3.7%.

Top lender Commonwealth Bank of Australia closed at a four-month low, losing 2.5%, while No. 2 bank Westpac Banking Corp shed 3.1%.

Healthcare firms, which conduct a majority of business overseas, declined 2.3% on a strengthening Australian dollar.

Index heavyweight CSL Ltd and U.S.-based Resmed Inc lost 2.2% and 1.5%, respectively.

The technology sub-index fell 4.2%, tracking overnight losses on Wall Street.

Software-as-a-service firm Xero Ltd fell 3.5%, while buy-now-pay-later company Afterpay Ltd lost 4.2%.

The energy sub-index hit a over one-year closing low, with heavyweights Woodside Petroleum and Santos Ltd closing down 3.4% and 1.9%, respectively.

Among gainers, gold stocks rose 4.1%, as bullion prices surged on the emergency rate cut by the Fed.

Heavyweights Newcrest Mining and Northern Star Resources ended up 3.7% and 6.8%, respectively.

Mining sector ended 0.5% higher, with Rio Tinto and Fortescue Metals Group gaining 1.4% and 0.8%.

In New Zealand, the benchmark S&P/NZX 50 index gained 0.6% to finish at 11,417.78.

Gains in utilities and healthcare firms kept the market in positive territory, with energy retailer Mercury NZ and Fisher & Paykel Healthcare Corp rising 3.2% and 2.5%, respectively.

Meanwhile, Air New Zealand announced further capacity cuts through to the end of June, and reported a case of coronavirus on board. The company’s shares fell 2.1%. (Reporting by Sameer Manekar in Bengaluru; Editing by Maju Samuel)

Our Standards:The Thomson Reuters Trust Principles.

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