Australian shares ended lower on Thursday, with mining stocks dominating the losses, as a sharp rise in the death toll from the coronavirus epidemic dented risk appetite and fanned fears of an economic slowdown in China.
The S&P/ASX 200 index slipped 0.3 per cent to 7,008.40 at the close of trade. The benchmark closed 0.5 per cent higher on Wednesday.
The virus had claimed 170 lives in China, Australia’s largest trading partner, as of end-Wednesday, with the number individuals infected exceeding the 5,327 registered during the Severe Acute Respiratory Syndrome (SARS) outbreak in 2002 and 2003. . “We assess that Australia’s GDP could be around 0.2 per cent lower in 2020 as a consequence of the coronavirus, with most of this being felt in Q1 and Q2,” analysts at ANZ said in a note.
“This will add to the downside risks to growth in the first half of 2020 stemming from the bushfires,” they added.
The mining sector, which heavily exports to the world’s second-largest economy, slid 1.1 per cent to its lowest close since Jan. 6.
The sector was also dragged down by weak production results from some miners.
Lithium producer Pilbara Minerals dropped nearly 12 per cent to close at a more than three-week low after it posted a 69 per cent plunge in spodumene concentrate production for the December quarter.
Safe-haven gold stocks fell 0.5 per cent as the country’s biggest gold producer Newcrest Mining reported lower quarterly output due to shutdowns and recent bushfires. The company’s stock finished 2.8 per cent lower and was a major drag on the broader mining index.
Healthcare stocks declined 1.4 per cent, pulled lower by a 2 per cent drop in heavyweight CSL Ltd and a near 1 per cent decline in Cochlear.
Bucking the trend, financial stocks ended 0.4 per cent higher, led by the “Big Four” banks, as a rate cut by the Reserve Bank of Australia at its first policy meeting of the year next week appeared less likely.
Following a stronger-than-expected employment report last week, economists at National Australia Bank were the latest to push back their forecast for further monetary easing by the country’s central bank to April from February.
New Zealand’s benchmark S&P/NZX 50 index finished the session marginally lower at 11,665.65.
Gentrack Group closed about 5 per cent lower, while Skycity Entertainment declined 2.6 per cent.
Source: Economic Times
