Australia: Shares dip on Hong Kong unrest

[SYDNEY] Australian shares settled lower on Wednesday as rising tensions in Hong Kong over China's proposed security law took the shine off surging bank stocks and tempered expectations of a global economic recovery.

The S&P/ASX 200 opened lower but recouped losses to rise 1 per cent in intraday trade. However, selling in the final 15 minutes of trade wiped out the gains, with the index closing 0.1 per cent lower at 5,774.4.

New Zealand's S&P/NZX 50 bourse rose 1.2 per cent to 11,049.19 and hit a fresh two-and-a-half-month high.

Gains in New Zealand were in contrast to dips in many Asian markets following unrest in Hong Kong over a new security law proposed by Beijing that has also drawn the ire of the United States.

Losses in Australian equities were contained, however, as several countries re-opening for business fuelled hopes that the battered global economy could still be on the road to recovery.

"Markets are trying to compartmentalise the US-China-Hong Kong fracas away from the unbridled optimism around the re-opening narrative," said Stephen Innes, chief global markets strategist at AxiCorp.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Financial stocks were the standout performers on the Australian benchmark as they firmed 5.3 per cent and hit their highest level since March 16, after brokerage UBS said the sector would benefit from a faster-than-expected economic recovery.

Australia and New Zealand Banking Group, which was UBS' top pick, rose 8.2 per cent, while No 2 lender Westpac jumped 7.7 per cent. National Australia Bank surged 7.5 per cent as it also increased the size of its share sale by A$750 million (S$706.7 million).

However, buy-now-pay-later firm Afterpay slid 8.1 per cent in its worst session since March 23 as investors locked in profits after a five-day rally in its shares.

REUTERS