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Australia shares cut losses after weak China GDP, NZ lower

Published 15/07/2019, 01:07 pm
© Reuters.  Australia shares cut losses after weak China GDP, NZ lower
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* China GDP data soft as expected but June improves

* AMP down 18% after scrapping interim div

* Financials biggest drag on the benchmark

By Rushil Dutta

July 15 (Reuters) - Australian shares trimmed losses on Monday after China reported its economy grew at its weakest pace in nearly three decades, reinforcing expectations its government will roll out more stimulus measures.

The S&P/ASX 200 index .AXJO was 0.4% lower at 6,668.60 points by 0234 GMT after falling as much as 0.9% earlier in the session. The benchmark fell 0.3% on Friday and 0.8% last week.

China's second-quarter gross domestic product (GDP) slowed to 6.2% year-on-year, its weakest pace in at least 27 years, pressured by soft demand at home and abroad amid a bruising trade war with the United States. data marked a further loss of momentum for the economy from the first quarter's 6.4 percent, adding to expectations that Beijing needs to announce more support measures to boost consumption and investment and restore business confidence.

Data for June was more upbeat, however, suggesting earlier growth boosting measures may be starting to kick in.

"I think the China GDP data has definitely helped. We are seeing a bit of interest reappear in some of those miners on the back of those China GDP numbers," said Henry Jennings, senior investment analyst and portfolio manager at Marcus Today newsletter.

"Maybe we can continue to rally on the hope of more stimulus out of China and just close down about 15 points"

The Aussie mining sub-index .AXMM rose 0.7 despite iron prices ended flat on Friday but clocking their best week in three as persistent supply concerns underpinned the commodity. IRONORE/

Global miner Rio Tinto's Australia shares RIO.AX were up 0.9%, while those of larger rival BHP Group BHP.AX added 0.5%.

Gains in shares of BHP, which also has exposure to oil, were capped by losses in crude oil prices. O/R

However, the local financial sector .AXFJ , the biggest on the main board by weighting, offset gains in mining stocks by losing 0.8%.

Wealth manager AMP Ltd AMP.AX was the top decliner on both the sub-index and the benchmark, shedding nearly 18% to an all-time low.

Its shares dived after the company said the sale of its life insurance and wealth protection business was unlikely to proceed on existing terms due to regulatory constraints in New Zealand. AMP also cancelled its interim dividend.

Shares of Australia and New Zealand Banking Group ANZ.AX and Westpac Banking Corp WBC.AX , which had recently been pulled up by New Zealand regulators for disclosure breaches were off around 0.9% each.

Meanwhile, their 'Big Four' banking peers Commonwealth Bank CBA.AX and National Australia Bank NAB.AX lost around 0.5%.

New Zealand's benchmark S&P/NZX 50 index .NZ50 was 0.5% lower at 10,659.94, but still hovering around record levels.

The bulk of the losses were recorded in the telecom and healthcare sectors with shares of Fisher & Paykel Healthcare FPH.NZ losing the most on the benchmark, down 1.8%.

Spark New Zealand SPK.NZ shares declined 1.5%.

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