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Australian shares drop to near 3-week lows after poor U.S. data

Published 02/10/2019, 12:25 pm
Updated 02/10/2019, 12:30 pm
© Reuters.  Australian shares drop to near 3-week lows after poor U.S. data
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* Weak U.S. data more than reverses Wed gains on c.bank rate cut

* NAB slides after raising amount to compensate wronged customers

* Gold subindex is the only one in positive territory

By Nikhil Nainan

Oct 2 (Reuters) - Australian shares slid to near three-week lows on Wednesday, rattled by the same poor U.S. manufacturing data that increased worries across Asian markets about slowing global growth.

U.S. manufacturing activity tumbled to a more than decade-low, fuelling worries the U.S.-China trade war was catching up with the world's largest economy. S&P/ASX 200 index .AXJO declined as much as 1.5%, its biggest intraday drop in more than a month, to 6,641.7.

The benchmark had closed 0.8% higher on Tuesday, after the Reserve Bank of Australia cut rates for a third time this year to shore up the sluggish economy and signalled it was prepared to do more if needed. risks are probably going to outweigh what central banks can do at the moment," said Nick Twidale, a director & co-founder at Sydney-based trade finance provider Xchainge.

Financial stocks .AXFJ were Wednesday's biggest drags on the index. At 0212 GMT, the Big Four banks had slumped between 1% and 2.7%.

The biggest loser was National Australia Bank NAB.AX , the country's third largest lender. At one point, it was down 3.4% - its biggest intraday loss since mid-May - after setting aside a further A$1.18 billion ($792.02 million) to repay wrongly charged customer fees. charge stems from a government-backed inquiry last year into Australia's financial sector.

The weak U.S. data overnight sent oil and commodity prices lower, hurting energy and mining companies in Australia.

The world's biggest miner BHP Group BHP.AX and peer Rio Tinto (LON:RIO) RIO.AX dropped 1.8% and 2%, respectively.

The only sector managing to eke out some gains was gold stocks, with its sub-index .AXGD up 0.5%.

Helping generate that gain was Newcrest Mining NCM.AX , which edged 0.3% higher. Evolution Mining EVN.AX and St Barbara SBM.AX opened higher but then turned negative.

Gold prices inched higher in Asian trade after jumping 1% overnight following the U.S. data. GOL/

Consumer-focused sectors, which bounced on Tuesday's rate cut, all fell.

Qantas Airways QAN.AX dropped 1.4%, and the largest supermarket chain Woolworths Group WOW.AX fell 1%.

In New Zealand, the benchmark S&P/NZX 50 index .NZ50 fell 0.6%, or 68.74 points to 10,928.25.

Fletcher Building FBU.NZ fell 2.3%, while the local listing of Australia and New Zealand Banking Group ANZ.AX declined 2.4%.

However, Fonterra Shareholders' Fund FSF.NZ climbed 1.7% as international milk prices rose. more individual stocks activity click on STXBZ

($1 = 1.4899 Australian dollars)

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