Australia: Shares open the week in red; NZ falls

[BENGALURU] Australian shares recorded their biggest fall since August on Monday as broad-based losses dragged the benchmark into negative territory.

The S&P/ASX 200 index fell 73.1 points or 1.2 per cent to 6,048.3 by 0057 GMT following a 0.5 per cent gain on Friday.

"I think the key driver is the US jobs data we got on Friday night. The stock market is taking it as bad news because it is one of the key drivers of inflation and this just suggests potential higher inflation in the US and will eventually lead to potential higher interest rates," said Ric Spooner, chief market strategist at CMC Markets.

US job growth surged in January and wages recorded their largest annual gain in more than 8-1/2 years, bolstering expectations that inflation will push higher this year as the economy reaches full employment.

Mining stocks were among the biggest burdens on the index, with global miners BHP Billiton and Rio Tinto each shedding more than 2 per cent. BHP's falls pulled the index down by about 10.3 points.

The mining index saw its biggest intraday percentage loss since late June, with gold and copper prices dropping as the US dollar strengthened on the unexpectedly strong employment data.

The Australian gold index shed nearly three per cent.

Downer EDI, an integrated services business that designs, builds and runs infrastructure and facilities, fell around three percent after it said it would book an impairment on its mining-related business for the half-year to December 31.

Financials tracked their peers in the US, shedding more than one per cent, in line with a more than two per cent drop in the S&P Financial index. Commonwealth Bank of Australia dragged the benchmark about 3.9 points lower, while Westpac Banking Corp took it down about 4.2 points.

Westpac said its stressed assets fell slightly in the three months to Dec 31 and also announced plans to raise A$750 million (S$784 million) in capital through the launch of new hybrid securities.

Consumer stocks were also lower, with diversified conglomerate Wesfarmers Ltd falling to its lowest since late October.

Wesfarmers said it expects A$1.3 billion in writedowns for the first half of 2018, mostly against its newly acquired and loss-making British hardware division.

In New Zealand, the benchmark index fell about 1.6 per cent on broad based losses, marking its biggest intraday percentage loss since November 2016.

The S&P/NZX 50 index fell 1.6 per cent or 131.4 points to 8,283.91.

Healthcare and consumer staples stocks led the declines, with Fisher & Paykel Healthcare Corp losing about 2.9 per cent, while a2 Milk Co shed more than three per cent.

A2 Milk was also the biggest drag on the benchmark, pulling it back nearly 20 points.

Media company NZME Ltd fell after it said it would apply for leave to appeal the high court's decision to bar its merger with Fairfax Media Limited's New Zealand unit.

REUTERS