Australia, New Zealand: Shares track Wall Street losses on growth concerns

[BENGALURU] Australian shares posted their biggest intra-day percentage decline in a week on Tuesday, tracking Wall Street losses on concerns about slowing global economic growth and investor caution ahead of the US Federal Reserve meeting.

The S&P/ASX 200 index fell 1.2 per cent, or 66.2 points, to 5,592.1 by 0018 GMT. The benchmark rose 1 per cent on Monday.

The Fed is widely expected to raise interest rates again at the end of its two-day meeting on Wednesday but investors will be more focused on whether the central bank cuts its guidance on policy tightening in 2019.

"The markets are in a holding pattern until Thursday morning when we find out what's happening with the U.S. Fed," said Mathan Somasundaram, a Blue Ocean Equities market portfolio strategist.

He said while he expects some "bargain hunting" in afternoon trade to help markets pare losses, the benchmark is still likely to end in negative territory.

Wall Street's major indexes all slid more than 2 per cent on Monday, with the benchmark S&P 500 closing at its lowest in 14 months.

Financial stocks, which account for over a third of the benchmark index weight, led the losses.

Australia and New Zealand Banking Group and National Australia Bank dropped 2.3 per cent and 1.4 per cent, respectively, ahead of their annual general meetings on Wednesday which are likely to see shareholders vote against any executive remuneration plans in a year rocked by damaging revelations of misconduct in the sector.

Amid broader market weakness, gold stocks bucked the trend and were up 2 per cent with the Wall Street selloff and the weaker US dollar making the precious metal more attractive.

Gold mining heavyweights St Barbara and Evolution Mining rose 3.9 per cent and 2.1 per cent, respectively, while Northern Star Resources topped the gains.

New Zealand's benchmark S&P/NZX 50 index fell 0.5 per cent to 8,701.07.

Top constituent a2 Milk Company declined 1 per cent, while Synlait Milk fell 2.5 per cent.

Shares of Fletcher Building jumped as much as 6.8 per cent after the builder agreed to sell the Formica Group to Netherlands-based Broadview Holding BV for US$840 million. It later trimmed those gains to a 3.5 per cent rise.

REUTERS