You are here
Australia: Shares down on worries over impact of China's devaluation
[SYDNEY] Australian shares fell on Wednesday, dragged down by concerns over devaluation of the Chinese yuan and as the mining sector was hit by a reduced forecast for metal prices.
The S&P/ASX 200 index lost 41.929 points, or 0.8 per cent, to 5,431.300 at 0141 GMT. Earlier, it touched 5,428, its lowest level in a month. The benchmark fell 0.7 per cent on Tuesday.
China, Australia's largest trading partner, shocked global markets on Tuesday by devaluing its currency after a run of poor economic data. "It's having a huge impact. Markets the world over really hate uncertainty and Australia's economic future is so closely intertwined with what's happening in China," said Chris Conway, head of research and trading at Australia Stock Report.
The mining sector led losses, dropping 3.2 per cent after oil and iron ore prices dropped overnight and Morgan Stanley lowered its 2015 metals forecast. Rio Tinto Ltd was down about 5.6 per cent while Fortescue Metals was off 8.2 per cent.
Westpac was up 0.6 per cent, though most major banks edged down, with NAB losing 0.7 per cent.
Share trading advisory service Market Matters said it expected the Australian banking sector to decline further by between 3 per cent and 5 per cent and that it would be a keen buyer at those levels.
Investment service provider Computershare Ltd slumped as much as 11.7 per cent after the company said its full year net profit was down almost 40 percent. Casino operator Echo Entertainment Group Ltd fell as much as 4.9 per cent after saying its capital investment works would impact its FY2016 revenue.
For more individual stocks activity click on New Zealand's NZX50 share index was close to a one-month low, falling 0.5 per cent to 5,794.33 as investors followed Wall Street's lead after China's devaluation and turned cautious about stocks.
The index of top-10 stocks led the market lower, down 0.6 per cent, with only Fisher and Paykel Healthcare , which gained 1.7 per cent, defying the trend.
Casino operator Sky City fell 0.5 per cent as it reported a 31 per cent rise in net annual profit and said trading at the start of the new year.
The weakness in the dairy sector was reflected in Synlait Milk falling 2.6 per cent to a record low of NZ$2.20, while the Fonterra Shareholders Fund was 0.8 per cent lower.