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Australia shares fall amid doubts a U.S.-China trade deal is near; NZ down

Published 26/09/2019, 04:38 pm
© Reuters.  Australia shares fall amid doubts a U.S.-China trade deal is near; NZ down
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* All components of the Aussie benchmark fall

* Gold stocks are the biggest drags

* Rising oil supply hurts energy shares (Updates to close)

By Nikhil Subba

Sept 26 (Reuters) - Gold miners and energy stocks pushed Australian shares down on Thursday due to lower prices while some domestic investors were sceptical about U.S. President Donald Trump's comment that a trade deal with China could be reached soon.

The S&P/ASX 200 index .AXJO slipped 0.5% or 32.6 points to 6,677.60 at the close, with all components of the benchmark down negative territory. The index shed 0.6% on Wednesday.

Trump said a deal to end a nearly 15-month trade war with China could happen sooner than people think and that the Chinese were making big agricultural purchases from the United States. stocks are particularly sensitive to developments on the Sino-U.S. trade front, since China is Australia's largest trading partner.

"A comment that a deal is possible and that China wants to do a deal according to the White House, is not a concrete step towards any resolution and markets are still aware that this is a complicated negotiation and it could take longer," said Michael McCarthy, chief market strategist at CMC Markets.

Brad Smoling, managing director at Smoling Stockbroking, said there may be news about some friendly chats between Washington and Beijing every now and then, but noted that there was not much optimism about a ground breaking deal anytime soon.

"Aside from some agricultural products like soyabean and pork, I don't think America has much to offer as part of the mix in a trade deal," Smoling added.

The Australian gold index .AXGD ended nearly 4% down and was the worst performer on the benchmark, as gold prices fell early on Thursday and the dollar remained firm. explorer West African Resources WAF.AX slumped 5.5%, while peer Silver Lake Resources SLR.AX shed about 5% to its lowest since June 17.

The broader mining index .AXMM fell almost 1% to a more than over two-week low, dragged by weakness in iron ore and steel prices.

The energy subindex .AXEJ ended the day's session about 1% lower, hurt by a decline in oil prices after U.S. crude stockpiles unexpectedly rose and as Saudi Arabia maintained a faster-than-expected recovery of its oil production. oil and gas player Woodside Petroleum WPL.AX ended 1.3% lower and Santos Ltd STO.AX was nearly 2% lower.

Most banks, including the Big Four, declined. The heavy-weighted financial sector .AXFJ declined 0.5% to a one-week low.

New Zealand's benchmark S&P/NZX 50 index .NZ50 shed 0.4% or 38.67 points to finish at 10,822.77, dragged by telecom and financial stocks.

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