Australia, NZ: Shares steady but Brexit aftershock dampens sentiment

[SYDNEY] Australian shares were struggling to stabilise on Monday as Britain's shock vote to exit the European Union continued to reverberate across global markets, with the financial sector suffering the most.

The S&P/ASX 200 index did manage to edge up 0.3 per cent by 0228 GMT, though that follows a 3 per cent drop on Friday. The benchmark was 14 points firmer at 5,127.7.

"Once there is more certainty on how the UK will leave the EU and how central banks will support the transition, investor sentiment should improve," said Savanth Sebastian, an economist at CommSec.

"Domestic economic fundamentals remain sound, a result that should support high yielding blue-chip and mid cap cyclical stocks over the longer term."

Investors have also narrowed the odds on another cut in local interest rates by the Reserve Bank of Australia (RBA), with many analysts tipping a move in August once inflation figures for the second quarter are released.

Still, that was cold comfort for companies with an exposure to the UK, and the EU in general. One such victim was investment bank Macquarie which was down over 2 per cent on top of a 7 per cent drop on Friday. Another was asset manager Henderson Group Plc which shed 12 per cent.

Lottery operator Tatts Group Ltd fell 1.4 per cent after announcing the sale of its UK slots business and a downward revision to profit outlook.

New Zealand's benchmark S&P/NZX 50 index recouped early losses to be flat around 6,669.34.

The health sector led losses with health software company Orion Health Group down 1.9 per cent and Fisher and Paykel Healthcare falling 1.9 per cent.

Shares in Fonterra's fund, which provides investor exposure to the farmer-owned dairy exporter, lost 1.5 per cent.

Air New Zealand fell 1.4 per cent while online auction company Trade Me lost 1.1 per cent.

Accounting software company Xero led gains, rising 2.8 per cent while Auckland Airport was up 1.5 per cent.

REUTERS