Australia: Shares fall on souring ties with China, New Zealand dips

[BENGALURU] Australian shares fell on Thursday as investors feared government's decision to reject a China-backed company's offer to buy dairy firm could escalate tensions between the two nations, while bleak earnings in energy stocks further added to the gloom.

The Australian Financial Review reported that Australia will not approve China Mengniu Dairy's proposed buyout of some of the country's best-known milk brands from Japan's Kirin Holdings.

The S&P/ASX 200 index plunged 0.8 per cent by 0051 GMT, erasing all the gains from the previous session. The benchmark closed at more than a five-month high on Wednesday.

Leading the charge, energy stocks were set for their worst session since July 31 as crude prices slipped over concerns of a second prolonged wave of the Covid-19 pandemic.

Shares of sub-index heavyweights Santos and Origin Energy dropped about 4 per cent and 6 per cent as energy companies reported a dip in underlying profits.

Mining stocks tumbled to over a two-week low as the world's biggest producer of manganese, South32, reported an 80.5 per cent slump in full-year underlying profit.

Gold stocks fell nearly 2.6 per cent led by Chalice Gold Mines, down 4.87 per cent, followed by a 4.23 per cent drop in Dacian Gold.

Meanwhile, Australia's second-most populous state of Victoria reported a small daily increase in new coronavirus infections with 240 cases over the past 24 hours.

Technology stocks were the sole gainers, jumping over 2.4 per cent to touch a record high.

Shares of Afterpay surged to an all-time high after the buy-now-pay-later firm raised its annual core earnings forecast.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index dropped 0.4 per cent as of 0057 GMT.

The country's biggest airport operator, Auckland International Airport, dipped as much as 1.7 per cent after it scrapped final dividend and posted a steep fall in full-year profit.

The Reserve Bank of New Zealand's balance sheet will continue to grow as it supports the economy and financial system in response to the Covid-19 pandemic, a senior official said on Thursday.

REUTERS