* RBA cuts rates to record low of 0.5%
* Top four banks slip into losses after rate cut
* NZ benchmark rises most in over 3 years (Updates to close)
By Sameer Manekar
March 3 (Reuters) - Australian shares ended a seven-day losing streak to close higher on Tuesday, but gains were capped as the country’s top four lenders slipped following a rate cut by the central bank to cushion the economic impact of the coronavirus outbreak.
The S&P/ASX 200 index ended 0.7% higher at 6,435.70 points, after shedding 10.8% over the previous seven sessions in its longest losing streak since September 2018.
The Reserve Bank of Australia lowered rates to a record low of 0.5%, its fourth cut in less than a year, saying the coronavirus outbreak was having a “significant” hit on the economy.
A follow-up rate cut in April is the most likely next step for the RBA, David Plank, head of Australian economics at ANZ Research, said in a note.
“It seems more likely that the trend of the epidemic’s impact will become more negative in the near term, as new outbreaks spread,” he wrote.
Shares of the country’s “Big Four” lenders slipped after the rate cut, as it threatened their margins and added to pressure on profits.
The banks - Commonwealth Bank of Australia, Westpac Banking Corp, National Australia Bank and Australia and New Zealand Banking Group - all responded by cutting their variable home loan rates.
“While this is the right decision, pricing changes are increasingly challenging as the cash rate heads towards zero,” Westpac said in a statement.
Shares of CBA and Westpac gave up nearly 2% of early gains to end down, while Australia and New Zealand Banking Group and National Australia Bank also finished lower.
Offsetting the losses was a 1.6% gain in the mining sector , as copper and iron ore prices firmed on stimulus hopes.
Global miners BHP Group Ltd and Rio Tinto Ltd added 1.9% and 2.9%, respectively. Fortescue Metals Group climbed 3.3%, reversing from a 9% tumble in the previous session.
Healthcare firms, which conduct a majority of business overseas and benefit from a weaker local dollar, ended 2.5% higher.
Index heavyweight CSL Ltd and U.S.-based Resmed Inc rose 2.3% and 5%, respectively.
In New Zealand, the benchmark S&P/NZX 50 index rose 2.2% to finish at 11,346.31, marking its biggest intraday climb in over three years.
The bourse had lost 8% in the previous six sessions.
Financial and utilities sectors were among the top gainers, with dairy firm a2 Milk Co advancing 2.5% and electricity generator Meridian Energy gaining 4.6%. (Reporting by Sameer Manekar in Bengaluru; Editing by Sriraj Kalluvila)