February 6, 2018 / 1:31 AM / 6 months ago

Australian shares languish at 3-month lows on global risk-off trade

* Australian shares post biggest intraday drop in more than 1-year

* Benchmark at an over 3-month low

* Fewer than 5 stocks turn green on the benchmark

By Ambar Warrick

Feb 6 (Reuters) - Australian shares plunged on Tuesday as an exodus from global equities, prompted by rising bond yields and increasing concerns about U.S. inflation, dragged the local benchmark to more than three-month lows.

The S&P/ASX 200 index shed 181.70 points, or 3 percent, to 5,845.50 by 0031 GMT, its biggest intraday percentage drop since November 2016 and also falling below the psychologically important 6,000 level.

On Wall Street, the Dow posted its biggest ever intraday decline in absolute terms, falling almost 1,600 points.

Of the 200 stocks on the Australian benchmark, fewer than five were in the green.

“It’s a risk off trade, with bond yields rising, all the multiples that expanded are getting pulled back, which is hitting pretty much all the hot sectors,” said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

In Australia, financials were the biggest drags on the benchmark, with the Australian financial index dropping nearly 3 percent to a near five-month low. The four largest banks were the biggest weights on the index, pulling it down by 21 to 37 points.

Mirroring the benchmark index, the financial index clocked its biggest intraday percentage drop since November 2016.

Macquarie Group, the country’s largest investment bank, fell to a more than one-month low despite forecasting a record profit for fiscal 2018.

Materials were also lower, with the Australian metals and mining index losing about 2.3 percent. Global miners BHP Billiton and Rio Tinto weighed the index down a total of 56 points.

Metal prices rose slightly, with a few gold miners such as Gold Road Resources and Beadell Resources rising tracking the precious metal.

Consumer stocks were also down. Data showed Australian retail sales in December dropped 0.5 percent month-on-month, more than the 0.2 percent decline forecast in a Reuters poll.

In New Zealand, markets were closed for a public holiday. (Reporting by Ambar Warrick in Bengaluru; Editing by Sam Holmes)

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