Australia shares barely move; NZ slips as IMF downgrade fuels caution

[BENGALURU] Australian shares were stuck in neutral on Wednesday, with risk appetites taking a sharp hit after the IMF downgraded its global growth forecast a third time since October, rattling investors.

The International Monetary Fund said the US-China trade war and a disorderly Brexit were key risks, noting that the global economy is slowing more than expected.

The downgrade came on the heels of flaring tensions between the United States and Europe, with President Donald Trump threatening to impose tariffs on US$11 billion worth of EU products.

The S&P/ASX 200 index, largely unmoved for a second session, inched up 0.03 per cent or 1.7 points to 6,223.5 at the close.

Chris Weston, head of research at Pepperstone brokerage, said there were no reasons for buying stocks at present and "no catalyst across all geographies".

Instead, he said, there are "probably three or four very big reasons to take profit off the top after a strong run".

Mining stocks ran out of steam as China's iron ore futures pulled back from a record high and some investors booked large profits following the sector's recent rally.

Benchmark heavyweight BHP Group slipped 0.4 per cent and Fortescue Metals Group fell 0.2 per cent.

Blunting the losses among miners, gold stocks advanced as gold prices hovered near a two-week peak, with investors rushing to the safe-haven metal amid rising uncertainty.

Top miner Newcrest Mining rose 1.5 per cent, while Northern Star Resources and Saracen Mineral Holdings also climbed.

Financial stocks rose 0.3 per cent, after four losing sessions, with biggest lender Commonwealth Bank of Australia firming 0.7 per cent and fund manager IOOF Holdings up 1.9 per cent.

"It is a bit of rotation out of material stocks, with money coming into the financial space... we have seen a stronger Westpac consumer confidence number, which is somewhat positive for the banks," said Mr Weston.

A survey showed the Melbourne Institute and Westpac Bank index of consumer sentiment rose 1.9 per cent in April, bouncing modestly from one-year lows.

New Zealand's benchmark S&P/NZX 50 index fell 0.81 per cent or 79.34 points to finish the session at 9,707.96.

Index heavyweight a2 Milk Company shed 0.7 per cent. 

REUTERS