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Australia shares hit 4-month lows on US political risks; NZ falls

Friday, November 4, 2016 - 09:43

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[BENGALURU] Australian shares skidded on Friday after Wall Street fell for the eighth straight session ahead of next week's hotly contested US presidential election.

The S&P/ASX 200 index fell 0.7 per cent, or 36.65 points to 5,188.90 by 0100 GMT. Earlier, it hit its lowest in nearly four months, weighed down by losses in financial and energy sectors.

The benchmark index is on track for a loss of 1.8 per cent for the week.

The presidential race between Democrat Hillary Clinton and Republican Donald Trump has narrowed just days ahead of the Nov 8 election since the re-emergence of a controversy of her use of a private email server during her tenure as secretary of state.

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Surveys by the New York Times/CBS and the Washington Post/ABC showed a slimmer edge for Mrs Clinton over Mr Trump, with Mrs Clinton leading by 3 percentage points. A Washington Post/ABC poll showed Mrs Clinton 2 percentage points ahead.

Investors are also looking out for US payrolls data later in the day which could impact expectations for a Federal Reserve rate hike next month.

A healthy job reading could be an asset for Mrs Clinton in the Nov 8 election. She has argued that the Obama administration's policies have helped the economy create millions of jobs.

If Mr Trump wins, it will have a "very poor outcome" on the market, said Hugh Dive, senior portfolio manager at Aurora Funds Management.

However, "with the balance of power between legislative and judicial executive, it really limits what he can actually do," Mr Dive added.

Financial stocks were among the biggest losers, with the S&P ASX 200 Financials (GIC) down 1.2 per cent.

National Australia Bank Ltd dropped 5.5 per cent as shares trade ex-dividend, while Commonwealth Bank of Australia declined 0.8 per cent.

The S&P ASX 200 Energy (GIC) declined 1.2 per cent after global oil prices dropped over a record weekly surge in US crude inventories.

Index heavyweight Woodside Petroleum Ltd fell one per cent, while Origin Energy Ltd was down 2.3 per cent.

Mayne Pharma Group Ltd slumped 13.8 per cent after it issued an update of an investigation by the US Department of Justice (DOJ).

Lenders mortgage insurer Genworth Mortgage Insurance Australia Limited posted its biggest percentage loss in nearly 15 months, after it reported third quarter statutory net profit after tax was down 28.7 per cent from last year.

New Zealand's benchmark S&P/NZX 50 index fell 0.5 per cent or 34.99 points to 6,743.95, on track to finish lower for a fourth straight session. Consumer and technology stocks led the losses on the index.

Trade Me Group Ltd fell 3.7 per cent, and Fletcher Building Ltd shed 1.7 per cent.

REUTERS

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