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Australia shares slip on Fed comments, weak earnings; NZ rises

Published 02/05/2019, 11:32 am
Updated 02/05/2019, 11:40 am
© Reuters.  Australia shares slip on Fed comments, weak earnings; NZ rises
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* Dampened hopes of Fed rate cut by year end weigh

* NAB cuts dividend for the first time since 2009

* AMP posts near nine-fold increase in outflows

By Shreya Mariam Job

May 2 (Reuters) - Australian shares fell on Thursday, taking their lead from weakness on Wall Street, while large outflows from AMP and a dividend cut from NAB also weighed on sentiment.

The S&P/ASX 200 index .AXJO fell 0.4 percent or 28.2 points to 6,347.70 by 0105 GMT. The benchmark rose 0.8 percent on Wednesday.

Overnight, U.S. Federal Reserve Chairman Jerome Powell dampened market hopes of a rate cut this year, saying economic growth was solid. dovish stand the market was having going into it (the FOMC meeting) has been reset, so the U.S. dollar held up and most of the commodities fell and that replicated through our markets," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

In Australia, the financial index .AXFJ dropped 1.2 percent, dragged down by disappointing results from wealth manager AMP Ltd AMP.AX and fourth-biggest lender National Australia Bank NAB.AX .

Shares of AMP dropped 5 percent after it reported a near nine-fold increase in first-quarter cash outflows at its wealth management unit, as the company reels from damaging revelations of misconduct in an inquiry into the country's financial sector. posted a 7 percent rise in first-half cash profit but cut its dividend for the first time since 2009 to 83 cents from the 99 cents. of NAB dipped 0.6 percent.

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Australia's biggest supermarket chain, Woolworths Group WOW.AX , reported a 4.2 percent rise in third-quarter sales sending its shares to a more than four-year high.

Conglomerate Wesfarmers WES.AX made a bid to acquire Australian lithium miner Kidman Resources KDR.AX for about A$776 million ($544.29 million). Kidman shares rose as much as 45 percent, while those of Wesfarmers shed as much as 1.2 percent.

Energy stocks .AXEJ wiped out gains from the previous session. They fell as much as 1.4 percent to a near one-month low, with natural gas companies Woodside Petroleum WPL.AX and Santos STO.AX recording 1 percent and 1.2 percent declines, respectively.

The Aussie mining index .AXMM dropped 1.4 percent to its lowest since Feb. 12 after a drop in base metal prices.

New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.4 percent or 37.14 points to 10,003.56.

Spark New Zealand SPK.NZ gained 1.1 percent, while New Zealand listed shares of Australia and New Zealand Banking Group ANZ.NZ slid 2.3 percent.

($1 = 1.4257 Australian dollars)

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