Australia: Miners drag shares lower on reports of China restricting coal imports

[BENGALURU] Australian shares slipped on Tuesday, with miners incurring majority of the losses on reports that China was restricting coal imports from Australia, and on news of calls for higher regulatory scrutiny over surging iron ore prices.

The S&P/ASX 200 index fell 0.4 per cent to 6,631.3, its lowest close in nearly two weeks, after Chinese media outlets reported that the country's top economic planner had granted approval to power plants to import coal without clearance restrictions, except for Australia.

Coal is the third biggest export from Australia, which has been embroiled in a diplomatic dispute with its largest trading partner China.

Further hurting miners in Australia, China's steel producers called for regulatory investigation into a recent jump in iron ore prices. Benchmark Dalian iron ore futures had jumped for a fifth straight week last week, rising nearly 10 per cent on Friday.

"Coal companies have seen a capitulation in investor sentiment as the Chinese bans on all Australian coal have seen a savage sell-off," said James McGlew, executive director for corporate stockbroking at Argonaut.

"No question that the Chinese bans and tariffs slapped on a range of exports from Australia have spooked the horses and for the time being they continue to run away."

Australian miners lost about 2.1 per cent, their biggest since Nov 10, with BHP Group and Rio Tinto shedding 2.3 per cent and 1.3 per cent, respectively.

Pureplay coal exporters fell sharply, as well. New Hope Corp ended 2.7 per cent lower, China-controlled Yancoal Australia shed 8.4 per cent, and Whitehaven Coal lost about 6 per cent.

Heavyweight financials slipped, with all the "Big Four" banks ending in negative territory.

In New Zealand, the S&P/NZX 50 index declined 0.5 per cent to 12,767.17, its lowest close in a week.

Blue-chip stocks were among the top drags. NZ-listed shares of Westpac Banking Corp lost 1.7 per cent, while Spark New Zealand declined more than 2 per cent.

REUTERS