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Australian shares lose nearly $30 bln in value as global risks hammer sentiment

Published 03/10/2019, 05:26 pm
Updated 03/10/2019, 05:30 pm
© Reuters.  Australian shares lose nearly $30 bln in value as global risks hammer sentiment
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* Benchmark closes at a more than 1-month low

* Poor U.S. economic data, new trade war front hit sentiment

* Financials dominate losses

(Updates to close)

By Nikhil Nainan

Oct 3 (Reuters) - Australian shares dropped more than 2% on Thursday, losing about A$44 billion ($29.52 billion) in value, as Washington's move to slap tariffs on Europe and weak U.S. data added to escalating fears over slowing global economic growth.

The S&P/ASX 200 index .AXJO dived 2.2%, or 146.9 points, to 6,493, its lowest close in over a month.

Overnight, the United States said it will slap tariffs on $7.5 billion worth of goods from the European Union, threatening to spark a transatlantic trade war as global markets grapple with the more than year-long U.S.-China trade tussle. originating from the United States was two straight days of weak data - in the form of manufacturing and private jobs figures - with investors now awaiting Friday's non-farm payrolls for further clues about the health of the world's largest economy.

"Numbers out of the U.S. need to improve in the next couple of months for investors to feel more confident that a recession is not around the corner," said Michael Gable, the managing director at Sydney-based Fairmont Equities.

Concerns about the state of the world economy led to a broad sell-off in Australia, with gold stocks the only bright spot as investors sought safe-havens.

Just 15 out of the 200 stocks on the benchmark ended the session in positive territory, with financial stocks dominating losses.

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The Big Four banks were among the top drags, with National Australia Bank NAB.AX losing 3.5%. The other three closed between 2.4% and 2.8% lower.

Morgan Stanley (NYSE:MS) downgraded NAB, and warned that all the major banks should lower their payout ratios and target higher capital levels instead. and mining stocks were also among top losers on sustained weakness in oil prices and commodities.

Global miners BHP Group BHP.AX and Rio Tinto (LON:RIO) RIO.AX slumped 3.2% and 4.2%.

Gold stocks saw support on safe-haven buying, with Newcrest Mining NCM.AX up 2.8%.

Elsewhere, agricultural firm Webster Ltd WBA.AX surged 54% to a near 16-month high after it received an A$854 million takeover offer from shareholder PSP Investments. Zealand's benchmark S&P/NZX 50 index .NZ50 dropped 1.2% to two-week lows of 10,821.21.

Local listings of Australia and New Zealand Banking Group Ltd ANZ.NZ and Wesptac WBC.NZ slumped.

However, Fonterra Shareholders Fund FSF.NZ was among the few bright spots on the index, rising 4.3%. ($1 = 1.4905 Australian dollars)

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