* RBA cuts cash rate to 0.25%, as widely expected
* Financial sector closes at lowest level since June 2012
* Containment efforts would hurt economy - Capital Economics (Updates to close)
By Nikhil Subba
March 19 (Reuters) - Australian shares closed 3% lower at a more than four-year low on Thursday, as an emergency stimulus package by the country’s central bank failed to ease worries about the coronavirus’ economic blow.
The Reserve Bank of Australia (RBA) cut its cash rate to a record low of 0.25%, as widely expected, and launched quantitative easing for the first time.
But with most of the sectors ending in negative territory, the benchmark S&P/ASX 200 index declined 3.4% to 4,782.90 at the close of trade. It has lost nearly 26% of its value this month.
“Until the spread of the coronavirus starts to plateau and there are any signs of improvement, or a vaccine ... we’re going to see this period of volatility we have been experiencing, regardless of all this action from the central bank,” said Stephen Daghlian, market analyst at CommSec.
The financial sector closed down 7% at its lowest level since June 2012 and was the biggest drag on the benchmark. Three of the “Big Four” banks settled around 8% weaker, while Commonwealth Bank of Australia ended 4.7% lower, as the rate cut piled pressure on their margins.
Australia, which has recorded more than 500 coronavirus infections and six deaths, on Wednesday declared a “human biosecurity emergency” in the country, and warned that the coronavirus crisis could last at least six months.
“Draconian restrictions put in place will result in economic activity slowing and the unemployment rate rising sharply in the coming months,” Capital Economics analysts said in a note.
Energy stocks tumbled about 7% to their lowest since February 2004. Sector heavyweight Santos dropped 12.4%, while Woodside Petroleum tumbled to a near 16-year low.
A sell-off in travel stocks, meanwhile, showed no signs of slowing down. Qantas Airways plummeted 15.4% after it said it would halt international flights for the time being, while Flight Centre Travel Group sank 33% to over 10-year lows.
In a bright spot, the healthcare index closed 2.6% higher, buoyed by heavyweight drugmaker CSL, which gained nearly 5%.
New Zealand’s benchmark S&P/NZX 50 index fell 3.6% to finish the session at 9,114.53, as the total coronavirus cases in the country rose to 28 and data showed that the economy slowed in the last quarter of 2019.
Tourism Holding dove 31% to its lowest since January 2014, while Kathmandu Holdings closed at a record low.
Reporting by Nikhil Subba in Bengaluru; Editing by Aditya Soni