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Australia shares fall on N.Korea tensions; NZ also down
September 6, 2017 / 3:07 AM / 2 months ago

Australia shares fall on N.Korea tensions; NZ also down

Sept 6 (Reuters) - Australian shares fell on Wednesday as tensions over North Korea continued to spook investors.

The S&P/ASX 200 index was down 0.4 percent, or 24.53 points, to 5,681.70 by 0223 GMT.

A top North Korean diplomat warned on Tuesday that his country is ready to send “more gift packages” to the United States as world powers struggled for a response to Pyongyang’s largest nuclear weapons test at the weekend.

“The geopolitical situation clearly has to be of concern,” said James McGlew, executive director of corporate stock broking for Argonaut in Perth.

“A volatile cauldron is brewing up there at the moment and any kind of certainty that you could look at is that equities will be losers.”

The index was further dented by financial stocks, with the Aussie financial index slipping 1.6 percent to its lowest in nearly three months.

Australia’s four big banks lost between 0.8 percent to 1.3 percent.

Commonwealth Bank of Australia was the biggest drag on the main board, falling 1.2 percent. On Tuesday, Australia’s second biggest company by market value was slapped with a class action lawsuit over a money-laundering scandal by litigation financier IMF Bentham Ltd.

Meanwhile, Australia’s June-quarter gross domestic product slightly missed estimates, growing 0.8 percent from the previous quarter, data showed.

“The number sits within the range that the central bank was looking for albeit at the lower end, the market has taken it in its stride, overall the equity market has bounced a little bit off the day’s lows...” McGlew added.

Major miners BHP Billiton, Rio Tinto and Fortescue Metals Group fell in the range of 0.9 percent to 1.4 percent, hurt by weakening iron ore prices.

China’s iron ore futures dropped on Tuesday, snapping three sessions of gains.

However, the Australian gold index was on track for a fourth day of gains, rising as much as 1.6 percent, after gold prices climbed to a one-year high on Tuesday as demand for safe-haven assets remained robust.

Gold miners Newcrest Mining Ltd rose 0.8 percent and Doray Minerals Ltd was up as much as 6.4 percent.

Industrial stocks eked out minor gains, with toll road operator Transurban Group gaining 1.3 percent and airport operator Sydney Airport Holdings rising 1.4 percent.

New Zealand’s benchmark S&P/NZX 50 index fell 0.4 percent, or 31.15 points, to 7,744.40 by 0141 GMT.

Fletcher Building Ltd was the biggest drag on the index, falling 1.9 percent, while Spark New Zealand fell 1.2 percent. (Reporting by Chandini Monnappa in Bengaluru; Additional reporting by Sumeet Gaikwad and Nicole Pinto; Editing by Kim Coghill)

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