Australia: Shares falter as Covid-19 cases, US-China tensions rise
[BENGALURU] Australian shares settled lower on Tuesday as rising coronavirus cases in the country's most populous state and simmering Sino-US tensions spooked investors.
The S&P/ASX 200 index finished 0.61 per cent lower at 5,941.10, with the technology sector leading the retreat after US tech giants, including Amazon and Microsoft, fell overnight. The benchmark index gained almost 1 per cent on Monday.
New South Wales, Australia's most populous state, on Monday reported 14 new Covid-19 cases, on the heels of a surge in infections in neighbouring Victoria that forced it back into lockdown last week.
"Market has V shape recovery (expectation) for Q3 and that is not going to happen with VIC (Victoria) in lockdown," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.
"If NSW (New South Wales) goes into lockdown, it will be a big downgrade cycle."
Weighing on investor sentiment, tensions grew between the United States and China. The United States on Monday rejected China's disputed claims to offshore resources in most of the South China Sea, a move that Beijing criticised as inciting tensions in the region.
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"US-China tensions around Covid and now China's claims over the South China Sea could hurt the Phase One trade pact and make things much more difficult for potential further deals," said CommSec market analyst James Tao.
Technology stocks fell 4 per cent to a near two-week low. Buy-now-pay-later firm Afterpay declined 7.23 per cent, making it one of the top losers on the benchmark index, while Megaport lost 6.67 per cent.
Gold stocks fell 2.32 per cent as bullion prices were hit by a stronger dollar. Emerald Resources declined 7.94 per cent, while Alacer Gold shed 6.17 per cent.
In New Zealand, the S&P/NZX 50 index rose 0.52 per cent to 11,494.1.
Among top gainers on the New Zealand benchmark, Sanford rose 4.43 per cent, while Chorus added 3.85 per cent.
REUTERS
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