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Australia: Financials, consumer stocks drag shares; NZ falls

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Australian shares slid on Wednesday, following weak US stock futures, and data that showed the country's economic growth slowed last quarter.

[BENGALURU] Australian shares slid on Wednesday, following weak US stock futures, and data that showed the country's economic growth slowed last quarter.

Australia's gross domestic product (GDP) expanded 0.4 per cent in the December quarter, from an upwardly revised 0.7 per cent in the previous quarter. Analysts had looked for a rise of around 0.5 per cent.

The S&P/ASX 200 index fell 0.7 per cent, or 43.5 points, to 5,918.9 by 0114 GMT. The benchmark closed up more than 1 per cent in the previous session.

US President Donald Trump's top economic adviser, Gary Cohn, resigned on Tuesday after he lost a fight within the White House over Trump's plans to impose hefty tariffs on imported steel and aluminium.

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S&P 500 futures dropped more than one percent on the news.

"The tone is certainly set by the US and it appears to be a broad-based selling across a lot of our major stocks, with the banks getting hit harder. There is a lot of uncertainty that has been thrown into the equation with the resignation of Cohn, who was seen as a sensible, market-friendly adviser," said James McGlew, executive director for corporate stockbroking at Perth-based Argonaut.

Financial stocks were the biggest drag on the index, down more than 1 per cent, with the 'Big Four' banks losing between 0.5 per cent and 1.4 per cent.

Commonwealth Bank of Australia (CBA) said that it expects to raise about A$750 million (S$770 million) through an issue of hybrid capital notes on Wednesday.

"This (CBA's issue) is just another one of their instruments or PERLS as they're called," said Mr McGlew.

"CBA has very successfully spun these out, and this is more of a rollover of a previous series, another large issuance of debt. In fact, CBA is probably the least impacted of our major banks this morning." Westpac Banking Corp was the biggest loser by index points on the Australian benchmark, down as much as 1.6 per cent to its lowest in more than 8 months.

Consumer stocks were the second biggest drag on the main index.

Mr McGlew said that the consumer stock market has external forces at work, among them foreign entrants like supermarket operator Aldi setting up in Australia and pressuring retailers such as Woolworths Group and Wesfarmers Ltd.

Woolworths and Wesfarmers fell 1.1 per cent and 0.8 per cent, respectively.

"When you go down further, you have companies like Myer hopelessly hitting south and showing what a tough market retail is, getting competition from online retailers as well," Mr McGlew added. Myer Holdings plunged as much as 4.4 per cent.

The materials sector slipped as much as 0.8 per cent as base metal prices fell, with iron ore on the Dalian Commodity Exchange closing down 1.7 per cent at 520.50 yuan.

Meanwhile, New Zealand's benchmark S&P/NZX 50 index also fell, down 0.3 per cent, or 20.9 points, to 8,306.76, with healthcare and consumer staple stocks dragging the index down.

Fisher & Paykel Healthcare Corporation Ltd lost as much as 1.5 per cent, while dairy firm a2 Milk Company Ltd was on track for a fifth straight session of declines, down as much as nearly 2 percent.

REUTERS