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Australian shares down on weaker commodity prices, NZ lower

Published 26/11/2018, 12:05 pm
© Reuters.  Australian shares down on weaker commodity prices, NZ lower
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* BHP among top drags on Aussie benchmark

* Resource stocks plunge tracking commodity prices

* Sentiment fragile following weak Wall Street lead

By Ambar Warrick

Nov 26 (Reuters) - Australian shares started the week lower as weaker commodity prices weighed on heavyweight resource stocks, while most other sectors edged lower amid a wider aversion to equity markets.

Sentiment remains fragile as global trade concerns and a fall in Wall Street stocks on Friday provided a weak lead for share markets in Asian trade.

The S&P/ASX 200 index .AXJO shed 22.9 points, or 0.4 percent, to 5,693.3 by 0010 GMT. The benchmark rose slightly on Friday.

The Australian energy sector .AXEJ led declines and fell more than 2 percent as oil majors Beach Energy BPT.AX , Woodside Petroleum WPL.AX and Oil Search OSH.AX shed between 1 to 3.5 percent.

Oil prices plunged nearly 8 percent and plumbed a more than one-year low on Friday as fears of a supply glut intensified. A perceived slowdown in corporate and economic growth around the globe has raised concerns over sustainable demand for the fossil fuel. O/R

Also reeling from its oil exposure was diversified miner BHP Group BHP.AX , which fell more than 3 percent to hit its lowest since mid-April and putting it among the largest drags on the metals and mining sub-index .AXMM and the Australian benchmark.

Metals and mining stocks were also hit by weaker metal prices, with iron ore miners Rio Tinto (LON:RIO) RIO.AX and Fortescue Metals Group FMG.AX losing about 2.6 percent and 3.2 percent, respectively.

Chinese steel prices fell more than 2.5 percent on Friday, while nickel and copper prices also declined as investors worried about slowing demand from China. IRONORE/ MET/L

Financial stocks .AXFJ edged up as gains in three of the country's "big four" banks bolstered the sector, although most other stocks succumbed to heavy selling pressure.

Property developer Dexus DXS.AX rose about 0.5 percent after it said it would establish a $1.45 billion logistics trust with Singapore's sovereign wealth fund GIC. Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.15 percent or 12.82 points to 8,688.56 as milk heavyweights A2 Milk ATM.NZ and Fonterra FSF.NZ declined.

A2 Milk and Fonterra shed more than 1 percent each. While both stocks had been earlier lauded as "investor darlings" due to a strong market in China, weakening demand in the country has raised doubts about the companies being able to maintain their margins.

A2 Milk for example, has declined nearly 28 percent since its peak in February this year.

Lending some support to the benchmark, Fisher & Paykel Healthcare Corp FPH.NZ rose about 1.5 percent after clocking stronger interim earnings. The stock was among the top intraday performers on the benchmark.

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