Australian shares lower as consumer firms sag, dairy boosts NZ

Published 20/02/2019, 12:17 pm
© Reuters.  Australian shares lower as consumer firms sag, dairy boosts NZ
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* Fortescue beats estimates

* BHP at near 8-year high

* a2 Milk's China bet pays off

By Nikhil Nainan

Feb 20 (Reuters) - Australian shares slipped on Wednesday, erasing earlier gains as weakness in the consumer and property sectors offset a strong rally in resource related firms.

The S&P/ASX 200 index .AXJO fell 0.3 percent to 6,091.4 at 0106 GMT, after initially gaining as much as 0.3 percent. The index closed 0.3 percent higher on Tuesday.

Australia's biggest supermarket chain Woolworths Group Ltd WOW.AX fell 6.5 percent to its lowest in about two months after it warned of a prolonged slump in consumer sentiment and posted a lower-than-expected first-half profit. the country's biggest casino operator Crown Resorts CWN.AX also posted uninspiring first-half profit as gambling turnover from wealthy Chinese tourists declined. It fell 6.6 percent to nearly a 16-month low. Pizza Enterprise DMP.AX dropped as much as 8.1 percent as its first half profit also fell. the broader bearishness, resource-related stocks surged, with the mining index .AXMM up 2.3 percent to its highest in nearly eight years.

Fortescue Metals Group FMG.AX jumped 7.6 percent to a near two-year high, after its half year profit blew past estimates as it won higher prices for its iron ore. were also led by the world's biggest miner BHP Group BHP.AX , which rose 2.2 percent to its highest level since 2011, despite reporting a drop in first-half profit after market hours on Tuesday. (BHP) made a slight miss on earnings, these were due to outages that were known. It's a deferral of income rather than a destruction of it, so I think the market has given them an overall tick," said Michael McCarthy, chief strategist at CMC Markets and Stockbroking.

Upbeat sentiment supported strong gains from other top miners such as Rio Tinto (LON:RIO) RIO.AX , which was up 2.5 percent to a more than 10 year high.

In global markets, gold prices rose to 10-month highs as worries about a global economic slowdown spurred safe-haven bids, which pushed the gold sub-index .AXGD up 2.3 percent.

Resolute Mining RSG.AX and St Barbara SBM.AX climbed as much as 5.1 percent and 4.5 percent, respectively.

Cautioning against the earlier gains, McCarthy said that the balance of results were actually negative and that a market reversal wasn't surprising.

a2 Milk Company ATM.NZ boosted New Zealand's benchmark S&P/NZX 50 index .NZ50 up 0.3 percent, or 23.82 points to 9,248.08.

a2 Milk jumped 8.6 percent to an 11-month high after it reported a 55 percent surge in half-year profit as the company expanded market share in China despite the slowing economy there. more individual stocks activity click on STXBZ

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