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Australia shares end little changed amid virus fears; NZ slips

Published 24/01/2020, 05:37 pm
© Reuters.  Australia shares end little changed amid virus fears; NZ slips
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* Financials rose as near-term rate-cut appears unlikely

* Miners fall, bruised by weak iron ore prices

* NZ benchmark index clocks second straight weekly gain (Updates to close)

By Nikhil Subba

Jan 24 (Reuters) - Australian shares ended almost flat on Friday amid fears that the new coronavirus outbreak in China could have a negative impact on global economies.

The S&P/ASX 200 index .AXJO closed up 0.04% at 7,090.50, following a 0.6% weaker finish in the previous session. The benchmark rose 0.4% this week, its third straight weekly gain.

The World Health Organisation (WHO) called the new coronavirus that killed 25 people in China and infected more than 800 "an emergency in China" but stopped short of declaring the epidemic of international concern. Bei Liu, a portfolio manager at Tribeca Investment Partners, said Australia is a bit more isolated in terms of the virus outbreak and the potential economic disruption it could cause, and hence capital inflows to those markets have increased.

Being part of the Asia Pacific region, the Australian market is seen as defensive, she added.

The financial index .AXFJ , which accounts for about one-third of Australian benchmark's weightage, ended 0.3% higher as all of the "big four" banks gained.

Some economists have pushed back their expectations for a rate-cut in the near term after Thursday's strong jobs data, said Liu.

Low interest rates have pressured profit margins of Australian banks as the amount they earn from lending to customers have diminished.

Meanwhile, Australian employment outpaced forecasts for a second month in December, pushing the jobless rate to a nine-month low. Australia Group IAG.AX closed at its lowest since late-February 2019 and marked its biggest one-day decline in more than 17 months, after the company trimmed its full-year insurance margins due to hailstorm claims. healthcare sector .AXHJ closed up 0.7%, after hitting a record high earlier in the day, buoyed by index heavyweight CSL Ltd CSL.AX , which closed at an all-time peak.

Broader gains on the local benchmark, though, were tempered by losses in the mining sector .AXMM , which finished 1.3% lower, battered by a fall in iron ore prices due to concerns about the virus outbreak.

BHP Group BHP.AX fell 1.5% to close at a one-week low, while Rio Tinto (LON:RIO) RIO.AX tumbled 2.8% to its lowest since Jan. 16.

New Zealand's benchmark S&P/NZX 50 index .NZ50 edged 0.2% lower to end at 11,877.81. On a weekly basis, the New Zealand benchmark rose about 0.7%, its second straight weekly gain.

Electricity retailer Meridian Energy MEL.NZ and fishing company Sanford Ltd SAN.NZ were top losers, each shedding about 2%.

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