Australia: Shares little changed as blue chips weather trade worries

[BENGALURU] Australian shares made up early losses to be little changed on Friday, finding support despite heightened fears for global trade after US President Donald Trump surprised markets by imposing tariffs on Mexico.

Broader Asian shares were shaken and sovereign bonds surged as investors feared the shock move risked tipping the United States, and maybe the whole world, into recession.

The S&P/ASX 200 index was 0.1 per cent, or 8.9 points, lower at 6,383.2 by 0221 GMT. The benchmark was set for a fifth straight month in the black but on a weekly basis, was headed to lose almost all of last week's election surprise-driven gains.

"Australia is a developed nation next to the rest of Asia. When you've got Asian worries, emerging market worries, money tends to run out of China and emerging markets into Australia," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

"They tend to buy the large caps."

Shares of the world's biggest miner BHP Group reversed course to gain up to 0.3 per cent, even though overnight iron ore prices weakened. Fortescue Metals Group was also 0.6 per cent higher.

Among other blue-chips, pharma heavyweights such as Cochlear and CSL rose between 0.8 per cent and 1.4 per cent.

Banking behemoth Commonwealth Bank of Australia rose as much as 0.4 per cent.

Safe-haven gold stocks rose over 2 per cent, supporting the mining index, with Newcrest Mining up as much as 2.4 per cent and Evolution Mining hitting its best in over 3 months.

Gold miner St Barbara did not share in its peers' gains, falling as much as 8.8 per cent after slashing 2019 gold production outlook.

Oil and gas units registered the steepest losses, with the sub-index declining as much as 2.4 per cent. Santos, Woodside Petroleum and Oil Search all lost over 2 per cent.

Elsewhere, shares of Crown Resorts buckled as much as 5.4 per cent after casino mogul James Packer sold nearly half his stake in the firm to Hong Kong's Melco Resorts & Entertainment, dampening hopes for a full buyout.

The benchmark is on track to lose 1.2 per cent this week, pulling back from an 11-year high scaled last week when investors cheered a surprise election victory by the ruling conservative Coalition.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index rose 0.1 per cent to 10,077.20 by 0215 GMT.

Auckland International Airport was the climber on the main index, gaining as much as 1.7 per cent.

REUTERS