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By Soumyajit Saha
July 29 (Reuters) - Australian shares surrendered early gains to settle lower on Wednesday, as investors exercised caution in the face of a worsening domestic coronavirus crisis, and ahead of the U.S. Federal Reserve policy decision and key earnings reports.
The S&P/ASX 200 index .AXJO fell 0.2% to 6,006.4 in low-trading volume after rising 0.5% earlier.
Australian officials sent an emergency medical team to aged care homes in Melbourne, one of the several virus clusters that have sprung up at pubs, restaurants and schools across the city, to help contain the rapidly spreading outbreak. seeing evidence in the U.S. earnings reporting season of damage done by the new outbreaks, and we could see a similar effect in the reporting season here," said Michael McCarthy, chief market strategist at CMC Markets.
Wednesday's movement also pointed to a "lack of commitment from both buyers and sellers", especially ahead of risk events like the Fed policy decision and earnings reports from U.S. tech heavyweights later in the week, McCarthy added.
Dampening investor sentiment further, data showed Australian consumer prices fall by a record last quarter as the coronavirus crisis caused one-off slides in various costs. losers, the mining sector .AXMM lost 1.6%, with BHP Group BHP.AX and Rio Tinto (LON:RIO) RIO.AX sliding 2% and 0.7%, respectively.
Energy stocks .AXEJ fell more than 1%, with Woodside Petroleum Ltd WPL.AX and Santos Ltd STO.AX losing 1.3% and 1.5%, respectively.
Financials .AXFJ , however, rose with the 'big four' banks gaining between 1.1% and 2.1%, after the domestic financial watchdog withdrew a request for banks and insurers to freeze dividends due to the pandemic. miner IGO Ltd IGO.AX was the worst performer on the benchmark index after it flagged weaker gold and nickel production in 2021. Zealand's benchmark S&P/NZX 50 index .NZ50 ended 0.2% higher at 11,599.4, helped by gains in financial and healthcare stocks.