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Australia shares decline on weak manufacturing survey, fading U.S. stimulus hopes

Published 23/10/2020, 01:00 pm
Updated 23/10/2020, 01:06 pm
© Reuters.

* Mining stocks fall 1%, gold stocks down 2.5%

* BlueScope Steel surges 12%, tops benchmark index

* Australia's Oct Mfg PMI below estimate - IHS Markit

Oct 23 (Reuters) - Australian shares fell on Friday, weighed down by miners, as weak manufacturing survey data and waning hopes for a pre-election U.S. coronavirus relief package knocked investor sentiment.

The S&P/ASX 200 index .AXJO slipped 0.3%, or 19.3 points, to 6,154 by 0112 GMT, after a 0.3% drop in the previous session.

A preliminary IHS Markit survey showed Australian manufacturing activity expanded in October at a weaker pace than last month and also missed estimates, as coronavirus-driven lockdowns in parts of the country continued to hamper economy recovery. the U.S. presidential election just around the corner, global equity markets have been volatile as U.S. lawmakers struggle to reach agreement on a coronavirus aid package.

Hopes of a deal were further dimmed when House Speaker Nancy Pelosi said she and Treasury Secretary Steven Mnuchin had not spoken on Thursday. Australia, the metals and mining index .AXMM , the biggest constituent of the benchmark, slid 1%. Top iron ore miners Rio Tinto (LON:RIO) Ltd RIO.AX and BHP Group Ltd BHP.AX lost up to 1.4% each.

An overnight slump in bullion prices saw the gold sub-index .AXGD fall 2.5%. GOL/

Resolute Mining Ltd RSG.AX fell the most, sliding 4% after Citi trimmed its price target for the stock. Red 5 Ltd RED.AX was down 2.5%.

Tech stocks .AXIJ slipped 0.7%, with software maker WiseTech Global WTC.AX shedding 2.3%.

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Mineral sands producer Iluka Resources ILU.AX plunged 46% as the stock traded on a demerger-basis after spun-off unit Deterra Royalties DRR.AX started trading on the stock exchange. gainers, BlueScope Steel Ltd BSL.AX surged 12% in its biggest intraday percentage gain in four years on strong second-half outlook. New Zealand, the benchmark S&P/NZX 50 index .NZ50 fell 0.2% to 12,385.2, with IT services provider Serko Ltd SKO.NZ and Vista Group International Ltd VGL.NZ down about 2% each.

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