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Australian stocks fall as trade worries weigh on miners , NZ unchanged

Published 15/03/2019, 12:47 pm
© Reuters.  Australian stocks fall as trade worries weigh on miners , NZ unchanged
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* Morgan Stanley (NYSE:MS) downgrades ANZ to "underweight"

* Mining, financial stocks lead declines

* Gains in NZ industrials offset losses in consumer stocks

By Devika Syamnath

March 15 (Reuters) - Australian shares dipped into the red on thin volumes on Friday, as fresh concerns about global trade and the Chinese economy weighed on mining stocks while the financial sector continued its recent decline.

The S&P/ASX 200 index .AXJO was 1.4 points lower to 6,178.2 by 0121 GMT. The benchmark was set for its first weekly loss in three.

In global markets, European shares rose on voting that backed a Brexit delay but Wall Street faltered on a Bloomberg report of a likely delay in U.S.-China trade talks. MKTS/GLOB

"I expect the market to roll into a bit of a slight negative in the back end of the day because most of the local guys will lock in profit given the risk in Europe and U.S.," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

Mining stocks .AXMM lost more than 1 percent after copper prices dropped on Thursday as industrial output in China fell to a 17-year low in the first two months of 2019. MET/L

Australia relies heavily on raw material exports, most of which is lapped up by top consumer China and so local mining stocks are especially sensitive to factors affecting the Chinese economy.

Shares of BHP Group BHP.AX and Rio Tinto (LON:RIO) RIO.AX , two of the largest miners in the world, retreated as much as 1.6 percent and 0.8 percent, respectively.

Financial stocks .AXFJ extended losses to a sixth session, with the fall exacerbated by Morgan Stanley downgrading its rating on Australia and New Zealand Banking ANZ.AX to "underweight" from "equal-weight", sending its shares to their lowest in over a month.

"We believe revenue pressure is growing, ongoing positive cost surprises look unlikely ... ROE (return on equity) is not recovering, and the share price is vulnerable to earnings downgrades," said Morgan Stanley in a note.

Shares of three of the big four lenders declined between 0.4 percent and 1.6 percent, but National Australia Bank Ltd NAB.AX was slightly higher.

New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.03 percent to 9,432.34, with losses in consumer stocks offset by gains in industrials.

New Zealand listed shares of A2 Milk Company ATM.NZ fell 2.7 pct, while those of Tourism Holdings THL.NZ rose 2.1 pct.

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