June 12, 2020 / 1:47 AM / 24 days ago

Australia, NZ shares a sea of red as virus fears resurface

* ASX 200 set for worst week since April 24

* Energy stocks slump up to 6%

* New Zealand shares extend decline into fourth day

By Pranav A K

June 12 (Reuters) - Australian shares dropped 3% for a second straight session on Friday, tracking losses on Wall Street as investor fears over a possible resurgence of COVID-19 infections were aggravated by the dour outlook from the U.S. Federal Reserve.

Wall Street tumbled overnight in broad-based selloff a day after the Fed warned of a “long road” to recovery in the economy amid a report the U.S. coronavirus death toll may reach 200,000 at some point in September.

The S&P/ASX 200 index dropped 3% or 177.5 points to 5,783.1 by 0044 GMT, having closed 3.1% weaker on Thursday. The index is set to fall nearly 2% this week, its biggest weekly drop since April 24.

Energy stocks plunged as much as 6.1% to their lowest level in three weeks and accounted for most of the losses on the benchmark as crude prices fell.

Shares of Oil Search Ltd and Worley Ltd slumped 8.3% each.

Financial stocks dived 4.6% to their lowest since June 3. The so-called “Big Four” banks lost between 3.5% and 5.4%.

Elsewhere, Australia’s mining stocks dropped 2.8% as prices of iron ore, copper, aluminium and other industrial metals slumped.

Gold stocks, which had rallied in the previous two sessions on safe-haven buying, also edged lower with spot bullion prices trading flat.

Of the index’s 200 stocks, just one traded in the green as of 0043 GMT.

New Zealand’s benchmark S&P/NZX 50 index recouped much of its earlier losses to trade down 2.2% or 250.2 points to 10,904.8. Earlier in the session, the index declined as much as 4.6% in its worst sell-off since the markets crashed in March.

The benchmark extended losses into a fourth straight session even as the country’s manufacturing activity showed some signs of recovery in May. (Reporting by A K Pranav in Bengaluru, Editing by Sherry Jacob-Phillips)

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