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Australian shares drop as global virus cases climb, U.S. stimulus deal stalls

* Australia’s economic recovery path bumpy - Reuters poll

* ASX, NZX each mark lowest close in nearly three weeks

* NZ posts September trade deficit of NZ$1.017 Bln (Updates to close)

Oct 27 (Reuters) - Australian shares closed at a near three-week low on Tuesday, as a rise in cases of the novel coronavirus around the world and fading hopes on a timely U.S. stimulus deal stoked fears of a prolonged global economic pain.

The S&P/ASX 200 index fell 1.7% to 6,051.00, its lowest close since Oct. 7.

Record daily cases in the United States, Russia, France and many other countries, and a lack of progress in U.S. stimulus deal talks pulled global markets lower. Wall Street’s main indexes too closed down overnight.

“We are now past the time for a stimulus agreement in the United States. This now means that nothing will be forthcoming until, say, February 2021,” said Brad Smoling, managing director at Smoling Stockbroking.

Markets are starting to realise the possibility of a bank failure either in the United States or Europe due to untimely stimulus and possible further lockdowns from higher virus numbers, Smoling said.

Denting sentiment further was a Reuters poll that showed lower immigration and high unemployment will keep the Australian recovery’s path uneven despite the worst having passed for the economy.

Energy stocks were the top losers, closing nearly 3% lower as oil prices dropped.

Santos tumbled 3.6% and Woodside Petroleum closed 3.3% down.

Miners shed 2.2%, with BHP Group and Rio Tinto each falling about 2.5%.

The heavyweight financial index fell 1.3%, with the “Big Four” banks losing between 0.8% and 1.4%.

New Zealand’s benchmark S&P/NZX 50 index ended 1.8% lower at 12,251.91, a near three-week low.

New Zealand posted a monthly trade deficit of NZ$1.017 billion in September, compared with NZ$353.00 million in August, data from Statistics New Zealand showed on Tuesday. (Reporting by Nikhil Subba in Bengaluru; editing by Uttaresh.V)

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