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Australian shares extend losses on global growth, trade worries; NZ up

Published 06/12/2018, 12:18 pm
Updated 06/12/2018, 12:20 pm
© Reuters.  Australian shares extend losses on global growth, trade worries; NZ up
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* Banks, mining stocks top ASX losers

* Industrial stocks help NZX stay in black

By Devika Syamnath

Dec 6 (Reuters) - Australian shares fell for a third straight session on Thursday, beset by worries about slowing global growth and tensions between China and the United States.

A sharp drop in U.S. stock futures ESC1 added to bearish sentiment across Asia, following losses on Wall Street on Tuesday. U.S. markets were closed on Wednesday. MKTS/GLOB

The S&P/ASX 200 index .AXJO fell 0.6 pct or 33.4 points to 5,635. On Wednesday, the benchmark dropped 0.8 percent.

"We're just waiting for U.S. to come back and give us a bit more clarity," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

Risky assets have been whipsawed globally this week by first optimism then growing pessimism over fresh trade negotiations between Washington and Beijing, which are facing a tight 90-day deadline. An inversion in parts of the U.S. Treasury yield curve has also rattled investors by sparking fears of a recession.

On Thursday, Canadian authorities arrested a top executive of Chinese tech giant Huawei Technologies, fanning fears of a fresh flare-up in tensions between the U.S. and China that could jeopardise the chance of a trade deal.

"The market is trying to digest the U.S.-China trade deal, bond yields have come off - valuation-wise, the market looks quite good and its just the sentiment that's lagging and we expect the sentiment to improve over the next week or so."

Bank stocks .AXFJ and materials .AXMM accounted for most of the Australian benchmark's fall.

The "big four" banks lost between 0.9 and 2 percent while mining heavyweights Rio Tinto (LON:RIO) RIO.AX and BHP Group BHP.AX declined as much as 2 percent and 2.5 percent, respectively.

World base metal prices were all trampled by growth concerns of top metals consumer China. MET/L IRONORE/

Oil prices dipped ahead of a meeting of the world's biggest exporters, who will discuss cutting output to help shore up prices and curb excess supply. Australia's energy stocks .AXEJ were down as much as 0.8 percent.

New Zealand's S&P/NZX 50 index .NZ50 was up 0.2 percent to 8,801.22 at 0027 GMT, with industrial stocks topping gains.

Shares of retirement village operator Summerset Group Holdings Ltd SUM.NZ advanced as much as 3.2 percent.

The world's largest dairy exporter Fonterra FCG.NZ further lowered the forecast price it pays to farmers for milk, as global milk supply remained stronger relative to demand. also said it was looking to sell its 'Tip Top' ice cream business. Shares barely reacted to the news and were down 0.2 percent at 0026 GMT.

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