Australia, NZ: Shares post worst month ever amid recession fears

[BENGALURU] Australian shares closed 2 per cent lower on Tuesday, recording their worst monthly performance ever, as worries of a recession due to coronavirus-led lockdowns outweighed large fiscal support measures announced by the country.

The benchmark S&P/ASX 200 index shed more than 21 per cent in March, its biggest monthly drop on record, much higher than the 12.7 per cent it lost during its worst month during the 2008 financial crisis.

On Tuesday, the benchmark settled down 2.02 per cent at 5,076.80 after reversing course from a jump of 3.6 per cent during the session. The index jumped 7 per cent on Monday - its biggest intraday percentage gain on record.

Prime Minister Scott Morrison has pledged A$320 billion (S$282.38 billion) in fiscal support to prevent an economic crisis brought on by the coronavirus pandemic. This means Australia might have to borrow more than A$300 billion over the next 15 months - 15 per cent of annual economic output.

As a result, Australia's coveted AAA sovereign rating could be at risk from ballooning debt, with analysts noting that the surge in debt could see the ratings outlook for Australia cut to "negative" from "stable".

Healthcare stocks fell 3.8 per cent to lead the declines on the benchmark. In March, the sub-index dropped 5.9 per cent, its biggest monthly fall since October 2018.

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Heavyweight CSL Ltd, closed down 5.1 per cent and Ansell finished 6.3 per cent lower.

Mining stocks ended 4 per cent lower, pressured by BHP Group's 4 per cent drop and Rio Tinto's 3.4 per cent fall. The mining sector's 12.8 per cent drop in March was is its biggest monthly drop since November 2015.

Financial stocks slipped 0.4 per cent, with Commonwealth Bank of Australia ending 3.3 per cent down, the only one among the "Big Four" lenders to close in the negative territory. The heavyweight financial sector fell 27.8 per cent in March, marking its biggest monthly drop ever.

However, energy stocks advanced 0.5 per cent, helped by a recovery in oil prices from 18-year lows after US President Donald Trump and Russian President Vladimir Putin agreed to talks to stabilise energy markets.

Oil Search climbed 2.2 per cent, while Santos advanced 1.2 per cent.

The sector shed about 38 per cent in March, its biggest drop ever on a monthly basis.

In New Zealand, the benchmark S&P/NZX 50 index rose 1.4 per cent to end at 9,796.75. On a monthly basis, the index fell 13 per cent, its worst monthly drop ever.

Oceania Healthcare finished 11.3 per cent higher, while New Zealand Refining Co gained 13 per cent.

REUTERS