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Australia: Shares fall most in nearly 1 month on Federal Reserve's gloomy outlook

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Australian shares fell the most in nearly a month on Thursday, with heavyweight financials leading losses, after the US Federal Reserve's bleak outlook for the economy tamped down investor hopes of a speedy recovery from the coronavirus crisis.

[BENGALURU] Australian shares fell the most in nearly a month on Thursday, with heavyweight financials leading losses, after the US Federal Reserve's bleak outlook for the economy tamped down investor hopes of a speedy recovery from the coronavirus crisis.

Policymakers reiterated a continuing support for the US economy but projected it to shrink 6.5 per cent this year. Fed officials also flagged the need to keep the key interest rate near zero through at least 2022.

On track to snap a seven-session rally, the S&P/ASX 200 index declined as much as 1.8 per cent in its worst session since May 13. It was down 1.2 per cent, or 72.4 points, at 6,076.0 by 0039 GMT.

Leading losses in the region, financial stocks lost up to 2.8 per cent. Shares of the "Big Four" Australian lenders dropped between 2.4 per cent and 3.6 per cent and were set for a second straight day of losses.

A decline in crude prices led the energy index 2.3 per cent lower for a second straight session. Heavyweight Woodside Petroleum Ltd and Viva Energy Group slid 3.1 per cent and 3.2 per cent, respectively.

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Meanwhile, retailers continued to benefit from the shift to working from home as JB Hi-Fi Ltd rose 2.9 per cent to a near four-month high after the electronics retailer upgraded its profit forecast for the year by 20 per cent.

On the other hand, higher bullion prices sent gold stocks soaring more than 5 per cent to their highest level in a week.

Northern Star Resources led gains on the sub-index, rising 8.2 per cent, followed by Bellevue Gold, gaining 7.4 per cent.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index inched 0.1 per cent lower, or 16.2 points to 11,244.3. The benchmark was on track for its third straight session of declines.

New Zealand-listed shares of Westpac Banking Corp shed 4.5 per cent, while Air New Zealand lost 4.3 per cent.

REUTERS

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