Australian shares hit by ECB's surprise reversal; NZ at record high
* ECB's surprise dovish turn rattles markets
* Financials drag as top CEOs appear before govt
* Australian index slated for third straight week of gains
* New Zealand to gain for fifth straight week
By Ambar Warrick
March 8 (Reuters) - Australian shares pulled back on Friday
as financials and miners lost ground after a surprising dovish
turn by the European Central Bank inflamed concerns about the
state of the global economy.
The S&P/ASX 200 index fell 0.6 percent or 39.3
points to 6,224.6 by 0033 GMT. The benchmark rose 0.3 percent on
U.S stocks fell overnight after European Central Bank raised
fresh concerns over the global economy with an unexpected
decision to offer more stimulus, having only recently signalled
its intent to start tightening policy sometime this year.
In Australia, however, the wagers for policy stimulus this
year had underpinned its equities this week. The Reserve Bank of
Australia last month abandoned its long-held tightening bias in
the wake of rising economic risks.
The ASX 200 was set for a 0.5 percent gain this week, its
third straight week in the black.
Greg McKenna, Strategist, Trader, and Founder at McKenna
Macro, said the index would face resistance at 6,300.
For the day, financials lost substantially, with the sector
subindex shedding about 1.2 percent. The two largest
banks, Commonwealth Bank of Australia and Westpac
Banking were down 1.8 and 1.3 percent respectively, as
their Chief Executives face a day of parliamentary questioning
related to widespread misconduct in the sector.
In his opening statement before the parliamentary committee,
CBA Chief Executive Matt Comyn said there was "significant work
still to do" as the bank implemented the recommendations of the
powerful Royal Commission inquiry. Westpac's CEO was slated to
appear later in the day.
Shares in the other two largest banks in the country,
Australia and New Zealand Banking Group and National
Australia Bank, declined more than 1.5 percent each.
Their CEOs will appear before the parliamentary committee later
Mining stocks also dragged on the index, as
heavyweights BHP Group and Rio Tinto slumped
1.8 percent each. The two were also pressured by an overnight
dip in copper prices.
Automotive Holdings Group and Infigen Energy
were the largest decliners on the ASX 200 after S&P Dow
Jones Indices said they would be removed from the benchmark on
On the other hand, the industrial sector strengthened
slightly as a number of infrastructure developers gained.
Companies such as Transurban Group and Sydney Airport
Holdings stand to benefit from domestic stimulus, owing
to their government contracts.
New Zealand stocks touched a record high as utility and
consumer stocks gained. The benchmark S&P/NZX 50 index
rose 0.3 percent or 29.06 points to 9,466.42.
The New Zealand benchmark was set to gain 1.3 percent for
the week, their fifth week of gains.
New Zealand manufacturing sales volumes rose 2 percent in
the fourth quarter of 2018, data showed on Friday, with dairy
and meat products rising 4 percent.
A2 Milk Co Ltd rose about 1.7 percent, while energy
retailer Mercury NZ added 0.8 percent.
(Reporting by Ambar Warrick in Bengaluru
Editing by Shri Navaratnam)
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