Australia: Shares give up gains on virus worries; Fed decision awaited

[SYDNEY] Australian shares surrendered early gains to settle lower on Wednesday, as investors exercised caution in the face of a worsening domestic coronavirus crisis, and ahead of the US Federal Reserve policy decision and key earnings reports.

The S&P/ASX 200 index fell 0.2 per cent to 6,006.4 in low-trading volume after rising 0.5 per cent earlier.

Australian officials sent an emergency medical team to aged care homes in Melbourne, one of the several virus clusters that have sprung up at pubs, restaurants and schools across the city, to help contain the rapidly spreading outbreak.

"We're seeing evidence in the US earnings reporting season of damage done by the new outbreaks, and we could see a similar effect in the reporting season here," said Michael McCarthy, chief market strategist at CMC Markets.

Wednesday's movement also pointed to a "lack of commitment from both buyers and sellers", especially ahead of risk events like the Fed policy decision and earnings reports from US tech heavyweights later in the week, Mr McCarthy added.

Dampening investor sentiment further, data showed Australian consumer prices fall by a record last quarter as the coronavirus crisis caused one-off slides in various costs.

Among losers, the mining sector lost 1.6 per cent, with BHP Group and Rio Tinto sliding 2 per cent and 0.7 per cent, respectively.

New Zealand's benchmark S&P/NZX 50 index ended 0.2 per cent higher at 11,599.4, helped by gains in financial and healthcare stocks.

REUTERS