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Australia: Shares fall as Victoria lockdown dampens recovery hopes

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Australian shares fell on Wednesday as stringent curbs imposed by Victoria state to contain a spike in Covid-19 cases dashed hopes of a swift economic recovery.

[BENGALURU] Australian shares fell on Wednesday as stringent curbs imposed by Victoria state to contain a spike in Covid-19 cases dashed hopes of a swift economic recovery.

The country could take an economic hit of as much as A$1 billion (S$977 million) each week because of the restrictions, Treasurer Josh Frydenberg said.

Goldman Sachs analysts said the six-week lockdown in Melbourne will weigh 1.5 per cent on third-quarter GDP growth and added they now expected the country's economy to contract 3.4 per cent in 2020, compared to its prior estimate of a 2.75 per cent contraction.

The S&P/ASX 200 index fell 0.5 per cent to 5,983.1 by 0055 GMT, led by financials.

Financials declined 1.1 per cent after the peak banking body said Australian banks would extend the loan repayment deferral period for borrowers struggling to service their debts due to the pandemic to 10 months from six.

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Technology stocks fell 0.9 per cent, led by Afterpay. The buy-now-pay-later declined as much as 4 per cent following a discounted share placement.

The energy index fell 0.7 per cent, as oil prices eased after industry data showing a build in US crude stockpiles added to worries about oversupply.

Oil Search was down 3.2 per cent, while Beach Energy lost 2.4 per cent.

Among other stocks, Alumina slumped nearly 7 per cent, making it the top percentage loser on the benchmark index.

However, a spike in coronavirus cases across the globe sparked a safe-haven rush, sending gold prices to a more than eight-year high.

The gold sub-index rose 3.6 per cent to a record high. Northern Star Resources climbed as much as 6.5 per cent after it said it would pay FY20 interim dividend of A$7.5 cents per share, which it had earlier postponed.

In New Zealand, the benchmark S&P/NZX 50 index reversed its course to trade 0.2 per cent lower at 11,725.

Travel equipment retailer Kathmandu Holdings and flagship carrier Air New Zealand shed about 4 per cent each. 

REUTERS

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