Aussie shares drop on U.S. recession fears, NZ also falls
* Aussie shares hit lowest since Feb. 26
* Banks and miners account for most losses
* Westpac falls after flagging A$260 mln H1 earnings hit
* Gold stocks gain on safe-haven buying
By Aditya Soni
March 25 (Reuters) - Australian shares neared a four-week
low on Monday as investors fled risk-sensitive assets on worries
about a looming U.S. recession, but gold stocks gained on
Broad-based losses pushed the benchmark S&P/ASX 200 index
down 1.2 percent, or 71.7 points, to 6,123.5 by 0034
GMT. The benchmark firmed 0.5 percent on Friday.
U.S. Treasury 10-year note yields dropped below three-month
Treasury bill yields for the first time since 2007 on Friday
after disappointing U.S. manufacturing data, prompting a
sell-off on Wall Street as a yield curve inversion is seen as a
leading recession indicator.
Jeffrey Halley, Senior Market Analyst at OANDA, said the
gloomy U.S. data confirmed that "the global economy is slowing
down after a 10-year quantitative-easing-induced bull run."
However, he added that "until the U.S.-China trade talks
conclude for better or worse, it is too soon to predict how deep
the coming slowdown will be or even when it will occur".
Financials and materials stocks, which collectively account
for nearly 60 percent of the benchmark, led declines on Monday.
Top lender Commonwealth Bank of Australia slid 1.5
percent to its lowest level since Feb. 15.
Westpac Banking Corp fell as much as 1.8 percent to
a more than five-week low after flagging a A$260 million drop in
first-half cash earnings due to provisions for customer refunds
in the wake of an inquiry into financial sector wrongdoing.
Mining stocks, which were also reeling from lower
copper prices, were down 1.3 percent at a one-week low.
BHP Group Ltd and Rio Tinto Ltd fell 1.8
percent and 1.9 percent, respectively.
Rio on Sunday said it was suspending rail operations in the
Pilbara region and mining at the Robe Valley operations in
Western Australia as a severe tropical cyclone hit the state's
Healthcare stocks also declined, with benchmark heavyweight
CSL Ltd slipping 0.6 percent.
The heightened fears of a global economic downturn fuelled
safe-haven buying, pushing gold miners 1.9 percent
St Barbara Ltd was the benchmark's top performer,
rising 3 percent. Newcrest Mining Ltd climbed 2.6
percent to its highest level since July 2016.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50
index fell 0.5 percent or 49.24 points to 9,501.75. The
index closed at a record high on Friday.
Dairy firm a2 Milk Company Ltd slipped 1.2 percent,
while Meridian Energy Ltd fell 1.6 percent.
Elsewhere, shares of Air New Zealand Ltd rose 1.9
percent after the airline reported a rise in February passenger
load factor and passengers carried.
(Reporting by Aditya Soni in Bengaluru; editing by Darren
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