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Australian shares fall, set for first drop in four; NZ down too

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Australian shares weakened on Friday, tracking losses in S&P 500 and Nasdaq indexes on Wall Street overnight, as cautious optimism over US-China trade relations petered out.

[BENGALURU] Australian shares weakened on Friday, tracking losses in S&P 500 and Nasdaq indexes on Wall Street overnight, as cautious optimism over US-China trade relations petered out.

Global sentiment remained dampened after European Central Bank President Mario Draghi flagged "persistence of uncertainties" related to protectionism, emerging markets' vulnerability and market volatility, as the bank ended its crisis-fighting bond purchase programme.

The S&P/ASX 200 index slid 0.5 per cent or 30.6 points to 5,631 by 0034 GMT, on track for its first fall in four sessions, with financial stocks pulling the benchmark down. The finance index dropped as much as 0.9 per cent after rising for three straight sessions.

"Global economic and social worries continue. The market is pretty lacklustre this morning. Volumes and liquidity will continue to decline probably into next week and Christmas," said Damian Rooney, director of equity sales at Argonaut.

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The trade war between the world's top two economies has remained the key risk fanning global growth worries over the past few months.

Australian shares have lost about 9 per cent so far this quarter, on course for their steepest quarterly drop since the period ended Sept 30, 2011.

For the week, Aussie shares are on track to post narrow gains, helped by positive talk from the US and Chinese sides.

Australia's top four lenders - Commonwealth Bank of Australia, Westpac Banking Corp, Australia and New Zealand Banking Group, and National Australia Bank - were trading in negative territory.

Media major Nine Entertainment was the top per cent age loser on the benchmark, falling up to 10 per cent to its lowest level in over a year.

Most of the prominent healthcare stocks also weakened, with index heavyweight CSL Ltd falling as much as 1.6 per cent.

The metal and mining stock index pared initial gains before reversing course and was trading 0.4 per cent lower. Major miners BHP Group and Rio Tinto fell as much as 0.3 per cent and 1 per cent, respectively.

Gold stocks bucked the trend, putting as much as 0.8 per cent to recover from losses in the last two sessions.

Newcrest Mining and Evolution Mining were among top gainers in the index for the yellow metal.

New Zealand's benchmark S&P/NZX 50 index fell 0.5 per cent or 0.6 points to 8,743.57, its first slip after three sessions of uninterrupted gains, and was on course for a 0.3 per cent fall for the week.

REUTERS