January 13, 2020 / 6:07 AM / 5 days ago

Energy, healthcare sectors drag Australia shares lower; NZ slips

* Energy stocks slip on lower oil prices

* CSL drags healthcare sector down

* Miners bruised by weaker iron ore prices (Updates to close)

By Nikhil Subba

Jan 13 (Reuters) - Australian shares ended weaker on Monday, led by energy and healthcare sectors, as investors maintained a cautious stance ahead of a U.S.-China Phase 1 trade deal this week, and as bushfires raging across the country dented the mood.

The S&P/ASX 200 index was down 0.4% at 6,903.70, at the close of trade. The benchmark ended 0.8% higher on Friday.

China’s Vice Premier Liu He will visit Washington this week to sign the trade deal. The two nations, however, have not yet finalised what exactly will be signed, the White House said on Friday, adding that the translation of the deal was still not complete.

“Whilst markets will look for the prospect of phase-two deal ... this will somewhat hinge on the success of phase-one deal. As such, thornier issues such as enforcement may come back to haunt further negotiation progress in future,” analysts at Mizuho said in a note to clients.

Meanwhile, markets were wearisome in the aftermath of the raging fires on Australia’s east coast, which has already killed 27 people and scorched more than 10.3 million hectares of land so far. Many foreign exchange investors are increasingly betting that the bushfires will hurt the country’s economy.

In a note, analysts at RBC Capital Markets said the deadly east coast bushfires would likely impact Australia’s fiscal growth in 2020, while lowering their growth expectations for the country’s full-year gross domestic product to 2.1% from previous forecast of 2.4%.

Australia’s energy sub-index ended 1.1% lower, flagging its worst session since Dec. 31, 2019, after its components were hurt by a drop in oil prices amid easing fears of conflict between the United States and Iran.

Industry major Woodside Petroleum shed 1.2% to hit a one-week low, while Oil Search closed nearly 2% lower.

The healthcare sector dropped 1.1% at close, dragged lower by industry heavyweight CSL Ltd that declined 1.6% after marking its worst session in nearly two weeks.

Financial stocks finished 0.3% lower, with three of the ‘Big Four’ banks in the negative territory at close.

Expectations of an interest rate cut by the central bank have spiked due to mounting economic costs from the worst bushfires in recent memory, raising concerns for lenders whose profits have already come under pressure due to record low rates.

Miners also ended the session 0.3% weaker, as major stocks were bruised by lower prices for iron ore.

The world’s largest miner BHP Group declined 1%, while peer Rio Tinto slipped 0.3% at close.

New Zealand’s benchmark S&P/NZX 50 index dipped 0.07% to finish the session at 1,1543.67.

Tourism Holding fell 3% at close, while NZX Ltd weakened 2.2%. (Reporting by Nikhil Subba in Bengaluru, Editing by Sherry Jacob-Phillips)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below