Australia: Shares end at 3-month low as growth fears sap risk appetite

AUSTRALIAN shares on Tuesday (May 10) closed at their lowest in more than 3 months, as caution around interest-rate hikes, global economic growth, and the impact of tightened lockdowns in China triggered a broad-based sell-off in equities.

The S&P/ASX 200 index ended 1 per cent lower at 7,051.20, its lowest since Jan 31, and a third straight losing session.

All major sub-indexes on the local bourse declined.

“It feels to me that the (Australian) market is getting close to a bottom,” said Brad Smoling, managing director at Smoling Stockbroking.

The metals and mining index hit an over 4-month low, slumping 2.7 per cent on weak iron ore prices.

Sector majors BHP Group, Rio Tinto and Fortescue Metals Group dropped between 2.6 per cent and 3.6 per cent.

Energy stocks slid 2.1 per cent to their lowest in more than a month after crude prices tumbled due to Covid-19 lockdowns in top oil importer China and concerns over global demand outlook.

Although oil prices have been falling in the last couple of days, “it is still looking strong, which indicates ... that this is more of a correction,” Smoling added.

Major oil and gas explorers Woodside Petroleum and Santos fell 2.6 per cent and 1.7 per cent, respectively.

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Financials were down for a fourth straight day, shedding 0.4 per cent, and touched an 8-week low.

Two of the country’s “Big Four” banks declined about 0.9 per cent, while National Australia Bank and Westpac Banking rose about 0.3 per cent and 0.2 per cent, respectively.

Gold stocks also retreated 3.1 per cent, touching their lowest since Feb 14, with Northern Star Resources and Newcrest Mining down 3.6 per cent each.

Separately, a survey showed Australia’s business conditions rose strongly in April as hard-hit services recovered from the lagged effect of the Covid-19 pandemic.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index slipped 1.3 per cent to finish at 11,229.45. REUTERS