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Australian shares open the week in red; NZ falls

Published 05/02/2018, 12:38 pm
Updated 05/02/2018, 12:40 pm
© Reuters.  Australian shares open the week in red; NZ falls
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* Australian shares post biggest intraday drop since August

* Materials and financials biggest drags on the index

* NZ shares post biggest intraday drop since Nov. 2016

By Ambar Warrick

Feb 5 (Reuters) - Australian shares recorded their biggest fall since August on Monday as broad-based losses dragged the benchmark into negative territory.

The S&P/ASX 200 index .AXJO fell 73.1 points or 1.2 percent to 6,048.3 by 0057 GMT following a 0.5 percent gain on Friday.

"I think the key driver is the U.S. jobs data we got on Friday night. The stock market is taking it as bad news because it is one of the key drivers of inflation and this just suggests potential higher inflation in the U.S. and will eventually lead to potential higher interest rates," said Ric Spooner, chief market strategist at CMC Markets.

U.S. job growth surged in January and wages recorded their largest annual gain in more than 8-1/2 years, bolstering expectations that inflation will push higher this year as the economy reaches full employment. stocks were among the biggest burdens on the index, with global miners BHP Billiton (LON:BLT) Ltd BHP.AX and Rio Tinto (LON:RIO) Ltd RIO.AX each shedding more than 2 percent. BHP's falls pulled the index down by about 10.3 points.

The mining index .AXMM saw its biggest intraday percentage loss since late June, with gold and copper prices dropping as the U.S. dollar strengthened on the unexpectedly strong employment data. GOL/ MET/L

The Australian gold index .AXGD shed nearly three percent.

Downer EDI DOW.AX , an integrated services business that designs, builds and runs infrastructure and facilities, fell around three percent after it said it would book an impairment on its mining-related business for the half-year to December 31. .AXFJ tracked their peers in the U.S., shedding more than one percent, in line with a more than two percent drop in the S&P Financial index .SPSY . Commonwealth Bank of Australia CBA.AX dragged the benchmark about 3.9 points lower, while Westpac Banking Corp WBC.AX took it down about 4.2 points.

Westpac said its stressed assets fell slightly in the three months to Dec. 31 and also announced plans to raise A$750 million ($592 million) in capital through the launch of new hybrid securities. stocks were also lower, with diversified conglomerate Wesfarmers Ltd WES.AX falling to its lowest since late October.

Wesfarmers said it expects A$1.3 billion ($1 billion) in writedowns for the first half of 2018, mostly against its newly acquired and loss-making British hardware division. New Zealand, the benchmark index fell about 1.6 percent on broad based losses, marking its biggest intraday percentage loss since November 2016.

The S&P/NZX 50 index .NZ50 fell 1.6 percent or 131.4 points to 8,283.91.

Healthcare and consumer staples stocks led the declines, with Fisher & Paykel Healthcare Corp FPH.NZ losing about 2.9 percent, while a2 Milk Co ATM.NZ shed more than three percent.

A2 Milk was also the biggest drag on the benchmark, pulling it back nearly 20 points.

Media company NZME Ltd NZM.NZ fell after it said it would apply for leave to appeal the high court's decision to bar its merger with Fairfax Media Limited's FXJ.AX New Zealand unit.

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