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Australia: Shares drop as virus fears eclipse support packages; NZ down
[BENGALURU] Australian shares closed 3 per cent lower at a more than four-year low on Thursday, as an emergency stimulus package by the country's central bank failed to ease worries about the coronavirus' economic blow.
The Reserve Bank of Australia (RBA) cut its cash rate to a record low of 0.25 per cent, as widely expected, and launched quantitative easing for the first time.
But with most of the sectors ending in negative territory, the benchmark S&P/ASX 200 index declined 3.4 per cent to 4,782.90 at the close of trade. It has lost nearly 26 per cent of its value this month.
"Until the spread of the coronavirus starts to plateau and there are any signs of improvement, or a vaccine... we're going to see this period of volatility we have been experiencing, regardless of all this action from the central bank," said Stephen Daghlian, market analyst at CommSec.
The financial sector closed down 7 per cent at its lowest level since June 2012 and was the biggest drag on the benchmark. Three of the "Big Four" banks settled around 8 per cent weaker, while Commonwealth Bank of Australia ended 4.7 per cent lower, as the rate cut piled pressure on their margins.
Australia, which has recorded more than 500 coronavirus infections and six deaths, on Wednesday declared a "human biosecurity emergency" in the country, and warned that the coronavirus crisis could last at least six months.
"Draconian restrictions put in place will result in economic activity slowing and the unemployment rate rising sharply in the coming months," Capital Economics analysts said in a note.
Energy stocks tumbled about 7 per cent to their lowest since February 2004. Sector heavyweight Santos dropped 12.4 per cent, while Woodside Petroleum tumbled to a near 16-year low.
A selloff in travel stocks, meanwhile, showed no signs of slowing down. Qantas Airways plummeted 15.4 per cent after it said it would halt international flights for the time being, while Flight Centre Travel Group sank 33 per cent to over 10-year lows.
In a bright spot, the healthcare index closed 2.6 per cent higher, buoyed by heavyweight drugmaker CSL, which gained nearly 5 per cent.
New Zealand's benchmark S&P/NZX 50 index fell 3.6 per cent to finish the session at 9,114.53, as the total coronavirus cases in the country rose to 28 and data showed that the economy slowed in the last quarter of 2019.
Tourism Holding dove 31 per cent to its lowest since January 2014, while Kathmandu Holdings closed at a record low.