Australia: Shares end lower as miners, financials weigh

[BENGALURU] Australian shares closed lower on Wednesday, as iron ore miners tumbled on tighter anti-pollution measures in China, while banking stocks slid after the central bank dismissed market expectations of early rate hikes.

The S&P/ASX 200 index ended 0.8 per cent lower at 6,714.10, reversing the session's gains of as much as 0.5 per cent. The benchmark had risen 0.5 per cent on Tuesday.

Mining stocks slipped after Chinese iron ore futures slumped to their lowest in four weeks, pummelled by stricter anti-pollution measures in China's top steelmaking city of Tangshan.

Fortescue Metals Group, the world's fourth-largest iron ore miner, was the biggest loser on the index, falling 8.3 per cent. This was its biggest drop since Dec 2.

The more diversified Rio Tinto lost 5.5 per cent to hit a more than four-week low, while rival BHP Group declined 2.8 per cent.

Australia's central bank chief on Wednesday rebuffed market talk of rate hikes, saying it will take at least until 2024 to reach full employment and that there was still a long way to go for the economy to fully recover.

Markets had been increasingly pricing in rate hikes as early as late-next year, amid strong economic data and smooth vaccine rollouts. Bond markets have seen sharp sell-offs recently while equity markets remained nervous about support tapering off.

The financial sub-index, which had been rallying on expectations of margin recovery for banks, recorded their biggest drop since Feb 26.

Commonwealth Bank of Australia and Westpac Banking fell 1.3 per cent each, while National Australia Bank shed 1.5 per cent. The smaller Australia and New Zealand Banking Group lost 2 per cent.

Energy stocks fell too after oil prices dropped.

Index heavyweight Woodside Petroleum slipped 2.7 per cent, Santos fell 3.8 per cent and Beach Energy declined 3.4 per cent.

New Zealand's benchmark S&P/NZX 50 index rose 0.9 per cent, with Air New Zealand gaining the most with a 3.5 per cent rise.

REUTERS