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Australasia, News

Australia shares end lower as virus spike forces stringent curbs

(Updates to close)

By Soumyajit Saha

July 6 (Reuters) – Australian shares closed lower on Monday, snapping four straight sessions of gains, as a spike in domestic cases of the novel coronavirus forced fresh restrictions and renewed fears of further economic pain.

The S&P/ASX 200 index closed 0.7% lower at 6,014.6. For the year so far, the index has shed 9.37%.

On Monday, the border between Victoria and New South Wales was closed for the first time in 100 years to contain a COVID-19 outbreak in Melbourne. Victoria reported 127 new infections overnight, its biggest one-day spike since the pandemic began.

“Investors in the Australian market seem to be cautious about the upsurge in infections and want it to be under control, unlike in the U.S. where an increase in cases does not seem to be weighing on sentiment as much”, said Henry Jennings, senior analyst at Marcustoday Financial.

The border closures come a day ahead of a Reserve Bank of Australia policy meet, where it is expected to hold the cash rate.

Among sectors, miners fell 1.2% led by BlueScope Steel Ltd that fell 3.25% after Morgan Stanley downgraded its rating and cut price target on the stock.

The healthcare index lost about 1.8%, with heavyweight CSL Ltd down over 2%.

Losses among industrial stocks also weighed on the benchmark, with toll road operator Transurban Group shedding more than 2%.

Construction firm ADBRI Ltd was the biggest percentage loser on the benchmark, after multiple brokerages raised concerns over the company’s loss of a lime supply contract with Alcoa.

The number of issues on the ASX that advanced were 851, while 696 declined.

Across the Tasman sea, New Zealand’s benchmark S&P/NZX 50 index rose 0.8%, helped by gains among utility stocks like Meridian Energy that rose 2.6%.

(Reporting by Soumyajit Saha in Bengaluru; editing by Uttaresh.V)

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