Australia shares slip on fears of economic pain from coronavirus; NZ slips

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

* Mining index dragged by weak production results

* CSL pulls healthcare index lower

* Banks buck trend on falling odds of Feb interest rate cut (Updates to close)

By Nikhil Subba

Jan 30 (Reuters) – Australian shares ended lower on Thursday, with mining stocks dominating the losses, as a sharp rise in the death toll from the coronavirus epidemic dented risk appetite and fanned fears of an economic slowdown in China.

The S&P/ASX 200 index slipped 0.3% to 7,008.40 at the close of trade. The benchmark closed 0.5% higher on Wednesday.

The virus had claimed 170 lives in China, Australia’s largest trading partner, as of end-Wednesday, with the number individuals infected exceeding the 5,327 registered during the Severe Acute Respiratory Syndrome (SARS) outbreak in 2002 and 2003. . “We assess that Australia’s GDP could be around 0.2% lower in 2020 as a consequence of the coronavirus, with most of this being felt in Q1 and Q2,” analysts at ANZ said in a note.

“This will add to the downside risks to growth in the first half of 2020 stemming from the bushfires,” they added.

The mining sector, which heavily exports to the world’s second-largest economy, slid 1.1% to its lowest close since Jan. 6.

The sector was also dragged down by weak production results from some miners.

Lithium producer Pilbara Minerals dropped nearly 12% to close at a more than three-week low after it posted a 69% plunge in spodumene concentrate production for the December quarter.

Safe-haven gold stocks fell 0.5% as the country’s biggest gold producer Newcrest Mining reported lower quarterly output due to shutdowns and recent bushfires. The company’s stock finished 2.8% lower and was a major drag on the broader mining index.

Healthcare stocks declined 1.4%, pulled lower by a 2% drop in heavyweight CSL Ltd and a near 1% decline in Cochlear.

Bucking the trend, financial stocks ended 0.4% higher, led by the “Big Four” banks, as a rate cut by the Reserve Bank of Australia at its first policy meeting of the year next week appeared less likely.

Following a stronger-than-expected employment report last week, economists at National Australia Bank were the latest to push back their forecast for further monetary easing by the country’s central bank to April from February.

New Zealand’s benchmark S&P/NZX 50 index finished the session marginally lower at 11,665.65.

Gentrack Group closed about 5% lower, while Skycity Entertainment declined 2.6%.

Reporting by Nikhil Subba in Bengaluru; Editing by Aditya
Soni

Our Standards:The Thomson Reuters Trust Principles.

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