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Australia, NZ shares retreat as ECB holds rates steady

Published 26/07/2019, 12:34 pm
© Reuters.  Australia, NZ shares retreat as ECB holds rates steady
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* Financials set to rise 1.8% this week

* Miners on track for biggest weekly decline since May

By Niyati Shetty

July 26 (Reuters) - Australian shares fell on Friday after three straight sessions of gains, with declines led by tech stocks and financials as investors registered disappointment with European Central Bank putting off an interest rate cut until probably September. S&P/ASX 200 index .AXJO fell 0.4% or 23.9 points to 6,794.10 by 0155 GMT. The benchmark rose 0.6% on Thursday and was set to gain 1.2% for the week.

"Equity markets responded to the ECB very much in a “buy the rumour sell the fact” way," ANZ said in a note.

The financials sub-index .AXFJ lost 0.6%, with the "Big Four" banks retreating between 0.3% and 0.8%, but the sub-index was still set to rise 1.8% for the week.

National Australia Bank NAB.AX lost 0.6% and Australia and New Zealand Banking Group ANZ.AX lost 0.7%.

The focus is now squarely on what the U.S. Federal Reserve decides next week at a policy committee meeting, with expectations running high for a cut in rates.

Lower U.S. interest rates will help lenders borrow U.S. denominated notes at cheaper rates, and alleviate some of the pressure on margins following two rate cuts by the Reserve Bank of Australia earlier this year.

Tech stocks .AXIJ dropped 1.6%, in line with Wall Street peers that fell after disappointing results from chipmakers, and social media giant Facebook (NASDAQ:FB) warned that new rules and product changes aimed at protecting user privacy would slow its revenue growth into next year. .N

Computershare CPU.AX fell 0.8% and Australia-listed Xero XRO.AX lost 1.8%.

Energy firms .AXEJ gained 0.4%, as oil prices rose overnight supported by rising tensions between the West and Iran. O/R

Woodside Petroleum WPL.AX gained 0.3% and peer Oil Search OSH.AX advanced 0.7%.

Mining stocks .AXMM were marginally higher, after falling 2% in the previous session. The sub-index was on track for a 1% weekly decline.

Global miners BHP Group BHP.AX and Rio Tinto (LON:RIO) RIO.AX added 0.3% and 1.2%, respectively.

New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.78% or 84.75 points to 10,811.76.

Auckland International Airport AIA.NZ slipped 2% and a2 Milk Company ATM.NZ lost 1.8%.

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