Australia shares hit by Wall St gloom; NZ posts biggest weekly drop in nearly 8 years

[BENGALURU] Australian shares slumped to a near four-month low on Friday as Wall Street was hammered by renewed selling on worries of higher inflation and interest rates.

The S&P/ASX 200 index fell 0.9 per cent or 52.700 points to 5,838.000 at the close of trade, giving up more than its modest 0.2 per cent gain on Thursday. The benchmark declined 4.6 per cent on a weekly basis, its biggest in over two years.

US stocks tumbled around 4 per cent on Thursday in another dramatic session, confirming a correction that has thrown the market's near nine-year bull run off course.

The latest selloff in global markets was triggered by last week's US payrolls data showing strong wages growth, stoking fears the Federal Reserve would raise rates at a faster pace than expected. The anxiety spread to financial markets worldwide and routed equities, as the spectre of inflation suggested global central banks will shut off the liquidity tap that has underpinned a robust rally in riskier assets.

Tracking their US counterparts, banks led the decline locally, with the Australian financial index giving up 0.5 per cent.

Macquarie Group Ltd, the country's biggest investment bank, lost 2.5 per cent, while Australia and New Zealand Banking Group Ltd fell 0.4 per cent.

Materials stocks were also under the cosh, with mining stalwart BHP declining 1.1 per cent to a seven-week low.

Mining stocks were also hurt by a weakening in copper and aluminium prices.

Myer Holdings Ltd fell to a record low and was the biggest per centage loser on the benchmark with a 9.3 per cent slide, after the department store operator issued a profit warning. It forecast first-half profit to fall more than 34 per cent and flagged a possible impairment charge.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index extended losses to a fourth consecutive session as it fell about 1 per cent or 84.770 points to finish the session at 8,092.370.

The index lost 3.8 per cent for the week, its biggest weekly decline in nearly eight-years.

Industrials and healthcare stocks led the fall, with Fisher & Paykel Healthcare Corp Ltd slipping 1.9 per cent to an over 2-1/2 month low, while Auckland International Airport Ltd dropped 1.2 pct to an 11-week low.

REUTERS