Australia: Shares close lower after China central bank keeps rates unchanged

[BENGALURU] Australian shares settled slightly lower on Monday (Mar 21) after a volatile session of trading, as China's central bank dashed hopes for an interest rate cut and the war in Ukraine raged on.

The S&P/ASX 200 index closed down 0.2 per cent at 7,278.50, after rising 0.8 per cent earlier in the session.

The People's Bank of China kept its benchmark interest rate unchanged, even after a pledge by the government last week to support the domestic economy and financial markets.

"Markets were hoping for stimulus from China and it seems that may take some time. Investors were hoping for a rate cut and that did not happen," said Mathan Somasundaram, chief executive at DeepData Analytics.

"China is unlikely to stimulate their economy while doing limited lockdowns to control Covid spread."

In Australia, asset manager Magellan Financial was one of the top losers on the benchmark. The stock closed nearly 4 per cent lower after co-founder Hamish Douglass resigned from the company's board.

Among sectors, technology was the top gainer. The sub-index closed 2.5 per cent higher, mirroring the robust performance of Wall Street peers on Friday. ASX-listed shares of Block climbed more than 9 per cent, while battery materials maker Novonix rose 8 per cent.

Miners rose after iron ore logged its fourth weekly gain on Friday, while energy stocks closed higher on stronger oil prices as European Union nations considered joining the US in banning Russian oil.

On the downside, gold stocks slid 2 per cent after the metal posted its biggest weekly drop in nearly 4 months on Friday.

Heavyweight Newcrest Mining fell 2.5 per cent.

"The gold sector will recover as the US Fed rate hike cycle is likely to be slower than inflation rise in the next 3-6 months," Somasundaram said.

New Zealand's benchmark S&P/NZX 50 index ended 0.02 per cent higher at 12,177.75. BENGALURU