Australia: Miners drag shares lower on weak iron ore prices; NZ dips on GDP jolt

[BENGALURU] Australian shares ended more than 1 per cent lower on Thursday, pressured by heavy losses in miners as iron ore prices tumbled for a third consecutive day, while New Zealand slipped as it entered its deepest economic slump on record.

The benchmark ASX 200 fell 1.2 per cent to close at 5,883.2, while the mining index dropped 2.4 per cent.

Fortescue Metals Group slumped 6.4 per cent, while global miners Rio Tinto and BHP Group fell 3.4 per cent and 1.8 per cent, respectively, as iron ore futures continued to drop on rising supply concerns due to a less than expected pickup in steel demand from China, Australia's largest trading partner.

"There are some demand concerns," said James Tao, a market analyst at CommSec, pointing to potentially lower demand for Australia's iron ore.

The coronavirus crisis is leaving considerable damage with New Zealand posting a record 12.2 per cent quarter-on-quarter contraction in the three months to June due to lockdowns, while a surprise fall in Australian unemployment rate laid bare the impact on young job seekers.

Overnight, the US Federal Reserve said it would keep interest rates near zero until inflation is on track to overshoot the central bank's 2 per cent target.

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Tech stocks dropped 3 per cent, tracking a selloff in their US peers.

"There weren't as many positive surprises to come through from the commentary from the US Fed chair or some kind of further stimulus that the central bank can provide," Tao said.

Shares of buy-now-pay-later firm Afterpay slumped 5.4 per cent, while aerial imagery tech maker Nearmap lost nearly 4.5 per cent.

Across the Tasman sea, New Zealand's benchmark S&P/NZX 50 index reversed course from early gains, slipping 0.3 per cent to finish the session at 11,777.13.

Mercury NZ and Spark New Zealand were the biggest percentage laggards on the benchmark, sliding over 3 per cent and 2 per cent, respectively.

Economists expect New Zealand to bounce back faster than other nations, who are still struggling to contain the coronavirus.

REUTERS