Australia shares slip on China tightening; NZ snaps six weeks of gains

[BENGALURU] Australian shares finished lower on Friday, with the mining index seeing its biggest fall in two months, after the China's central bank unexpectedly raised its short-term interest rates.

The S&P/ASX 200 index closed down 0.4 per cent, or 23.834 points, to 5,621.6. The index lost 1.6 per cent on the week.

The tightening of monetary policy by the People's Bank of China sent a fairly "punchy signal" across bulk commodities, taking miners along for a ride," said Chris Weston, an institutional dealer at IG Markets.

The central bank raised the interest rate on open market operation reverse repurchase agreements (repos) by 10 basis points.

The ASX metal & mining index fell 2.5 per cent in heavy trading, with over 251 million shares changing hands, about 1.4 times the 30-day average volume.

Mining giants BHP Billiton Ltd and Rio Tinto Ltd spearheaded the declines in the broader index, falling by more than 3 per cent.

Fortescue Metals Group Ltd also suffered losses, dropping by more than 4 per cent.

Also among the decliners was James Hardie Industries PLC, which lost 4.4 per cent after weak third quarter results.

Financials saw some losses, with ANZ Banking Group shares down nearly 1 per cent and Commonwealth Bank of Australia withering 0.4 per cent. "Financials were down because of China," Mr Weston said.

At the other end, gold stocks rose with Newcrest Mining Ltd up as much as 1.5 per cent.

New Zealand's benchmark S&P/NZX 50 index edged up 0.6 per cent, or 40.84 points, to 7,094.38. The index fell 0.6 per cent on the week, snapping six weeks of gains.

Materials and healthcare stocks led the gains, with Fletcher Building Ltd and Fisher & Paykel Healthcare Corporation Ltd rising 1.8 per cent and 2.3 per cent, respectively.

REUTERS