Australia: Shares checked by growth woes, Wesfarmers slides on M&A; New Zealand up

[BENGALURU] Australian shares were held back on Tuesday by lingering concerns about a potentially sharper global economic slowdown, while gains for miners were partially offset by losses in Wesfarmers in the wake of its bid to acquire rare earths miner Lynas.

The S&P/ASX 200 index was off 0.1 per cent or 4 points to 6,122.20 by 0027 GMT, having slumped 1.1 per cent on Monday.

Wesfarmers Ltd tumbled 3.8 per cent to a near three-week low and accounted for most of the losses on the benchmark as investors dumped the retail-to-chemicals conglomerate after it made a A$1.50 billion (S$1.44 billion) buyout offer for Lynas Corp.

"The acquisition is definitely not one of the top targets we would have picked for Wesfarmers," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

"It does not give market confidence as it as an asset with a fair amount of regulatory risk in an area where they (Wesfarmers) have not been able to get it right and I do not think Wesfarmers has a huge competitive advantage in managing this asset than what has been done," he added.

Lynas shares were on a trading halt.

Broad market sentiment in the region was also weighed down by persistent worries about the health of the global economy after weak US factory data last week prompted an inversion of the US Treasury yield curve - historically seen as a signal of a recession.

Santos, the country's No. 2 independent gas producer, dropped 1.7 per cent to its lowest since March 11, while Woodside Petroleum fell to a near two-week trough.

Moving in the opposite direction, shares of iron ore miners rose on concerns about supply of the steelmaking commodity after a Brazilian court issued an order that will delay the restart of a major Vale SA mine.

Fortescue Metals Group Ltd firmed 1.5 per cent, while BHP Group Ltd advanced 0.9 per cent.

Gold stocks, the sole gainers in the previous session, extended their rally on safe-haven appeal.

Saracen Mineral Holdings Ltd rose 3.5 per cent to its highest level since Feb 21.

Elsewhere, investment manager Challenger climbed as much as 8.9 per cent and was the top performer on the benchmark after announcing top shareholder MS&AD Insurance Group Holdings Inc will raise its stake in the firm to over 15 per cent and seek a board seat.

In New Zealand, the benchmark S&P/NZX 50 index rose 0.2 per cent or 17.60 points to 9,536.91.

Gains were underpinned by a jump in Spark New Zealand Ltd which climbed 2.6 per cent to a near three-week high.

REUTERS