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Australia, NZ shares steady but Brexit aftershock dampens sentiment

Published 27/06/2016, 12:46 pm
Updated 27/06/2016, 12:50 pm
© Reuters.  Australia, NZ shares steady but Brexit aftershock dampens sentiment

© Reuters. Australia, NZ shares steady but Brexit aftershock dampens sentiment

SYDNEY/WELLINGTON, June 27 (Reuters) - Australian shares were struggling to stabilise on Monday as Britain's shock vote to exit the European Union continued to reverberate across global markets, with the financial sector suffering the most.

The S&P/ASX 200 index .AXJO did manage to edge up 0.3 percent by 0228 GMT, though that follows a 3 percent drop on Friday. The benchmark was 14 points firmer at 5,127.7.

"Once there is more certainty on how the UK will leave the EU and how central banks will support the transition, investor sentiment should improve," said Savanth Sebastian, an economist at CommSec.

"Domestic economic fundamentals remain sound, a result that should support high yielding blue-chip and mid cap cyclical stocks over the longer term."

Investors have also narrowed the odds on another cut in local interest rates by the Reserve Bank of Australia (RBA), with many analysts tipping a move in August once inflation figures for the second quarter are released.

Still, that was cold comfort for companies with an exposure to the UK, and the EU in general. One such victim was investment bank Macquarie MQG.X which was down over 2 percent on top of a 7 percent drop on Friday. Another was asset manager Henderson Group Plc HGG.AX which shed 12 percent.

Lottery operator Tatts Group Ltd TTS.AX fell 1.4 percent after announcing the sale of its UK slots business and a downward revision to profit outlook. Zealand's benchmark S&P/NZX 50 index .NZ50 recouped early losses to be flat around 6,669.34.

The health sector led losses with health software company Orion Health Group OHE.NZ down 1.9 percent and Fisher and Paykel Healthcare FPH.NZ falling 1.9 percent.

Shares in Fonterra's FCG.NZ fund, which provides investor exposure to the farmer-owned dairy exporter, lost 1.5 percent.

Air New Zealand AIR.NZ fell 1.4 percent while online auction company Trade Me TME.NZ lost 1.1 percent.

Accounting software company Xero XRO.NZ led gains, rising 2.8 percent while Auckland Airport AIA.NZ was up 1.5 percent.

For more individual stocks activity click on STXBZ

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