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Australia shares slip on China tightening; NZ snaps six weeks of gains
February 3, 2017 / 6:31 AM / 8 months ago

Australia shares slip on China tightening; NZ snaps six weeks of gains

(Updates to close)

Feb 3 (Reuters) - Australian shares finished lower on Friday, with the mining index seeing its biggest fall in two months, after the China’s central bank unexpectedly raised its short-term interest rates.

The S&P/ASX 200 index closed down 0.4 percent, or 23.834 points, to 5,621.6. The index lost 1.6 percent on the week.

The tightening of monetary policy by the People’s Bank of China sent a fairly ”punchy signal“ across bulk commodities, taking miners along for a ride,” said Chris Weston, an institutional dealer at IG Markets.

The central bank raised the interest rate on open market operation reverse repurchase agreements (repos) by 10 basis points.

The ASX metal & mining index fell 2.5 percent in heavy trading, with over 251 million shares changing hands, about 1.4 times the 30-day average volume.

Mining giants BHP Billiton Ltd and Rio Tinto Ltd spearheaded the declines in the broader index, falling by more than 3 percent.

Fortescue Metals Group Ltd also suffered losses, dropping by more than 4 percent.

Also among the decliners was James Hardie Industries PLC , which lost 4.4 percent after weak third quarter results.

Financials saw some losses, with ANZ Banking Group shares down nearly 1 percent and Commonwealth Bank of Australia withering 0.4 percent.

“Financials were down because of China,” Weston said.

At the other end, gold stocks rose with Newcrest Mining Ltd up as much as 1.5 percent.

New Zealand’s benchmark S&P/NZX 50 index edged up 0.6 percent, or 40.84 points, to 7,094.38. The index fell 0.6 percent on the week, snapping six weeks of gains.

Materials and healthcare stocks led the gains, with Fletcher Building Ltd and Fisher & Paykel Healthcare Corporation Ltd rising 1.8 percent and 2.3 percent, respectively.

Reporting by Suhail Hassan Bhat; Additional Reporting by Aparajita Saxena in Bengaluru; Editing by Randy Fabi

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