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Weak oil prices, Caltex drag Australia shares lower

Published 20/04/2020, 11:16 am
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* Caltex slumps after Couche-Tard scraps offer

* Sydney Airport shares drop on plunging traffic

* New Zealand shares up for fifth straight day

By Shashwat Awasthi

April 20 (Reuters) - Australian shares fell on Monday as crude oil futures slumped amid concerns over plunging demand because of the coronavirus pandemic, and convenience store operator Caltex tumbled after a Canadian suitor dropped its takeover bid.

The S&P/ASX 200 index .AXJO fell 0.2% to 5,478 by 0024 GMT, after posting its fourth straight weekly gain.

Crude oil futures fell in electronic trading on Sunday evening, with U.S. futures touching levels not seen since November 2001. Energy stocks .AXEJ were the biggest drags on Australia's main bourse, giving up 2.4%. O/R

"The plunge in crude oil prices reflects a glut at the main U.S. storage facilities at Cushing," said Michael McCarthy, chief market strategist at CMC Markets.

"The ongoing pressure reflects worries that the historic agreement to cut global output by 10 million barrels a day may not offset the virus-induced demand destruction."

The virus also cost Caltex CTX.AX , whose shares skidded as much as 9.1% to a three-week low, after Alimentation Couche-Tard ATDb.TO cited pandemic-induced uncertainty for scrapping its takeover offer for the Australian company. of Sydney Airport SYD.AX fell 2.4% after the airport operator reported a more than 45% slump in passenger traffic for March and said data for the first 16 days of April showed traffic almost came to a standstill. expect the weakness in traffic will continue for several more months," Jefferies analysts said.

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Globally, investors now await details on when and how major economies plan to re-open and hope a treatment for the novel coronavirus will emerge soon after signs that an experimental treatment from U.S. drugmaker Gilead GILD.O was showing promise.

In New Zealand, where the government is due to decide on whether to extend or ease a month-long lockdown later in the day, the benchmark bourse S&P/NZX 50 .NZ50 advanced 0.5% to 10,830, heading for a fifth straight session of gains.

Meanwhile, data showed consumer inflation rose more than expected in the first quarter. today's context, what inflation did in Q1 is hardly relevant for monetary policy settings," ANZ Research analysts said.

"The Reserve Bank of New Zealand has already thrown the kitchen sink at it, but even more will be needed," the analysts said, as they expect the central bank to roughly double its quantitative easing to around NZ$60 billion ($36.05 billion). ($1 = 1.6642 New Zealand dollars)

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