* Energy stocks biggest drag in Australia, Afterpay slumps
* New Zealand falls as virus cases rise, GDP slows in Q4
By Pranav A K
March 19 (Reuters) - Australian shares gave up early gains to hit a four-year low on Thursday as investors turned their focus to a key central bank policy meeting amid rising fears of a coronavirus-induced recession.
The benchmark S&P/ASX 200 index jumped 3% in early trade after the European Central Bank’s 750 billion euro ($817.43 billion) bond purchase announcement, but quickly lost its steam to trade 1.5% lower by 0200 GMT. The benchmark lost more than 6% on Wednesday.
The Reserve Bank of Australia is set to make its announcement at 0330 GMT, where economists expect a quarter-point interest rate cut to 0.25% and its first ever quantitative easing programme to prevent a recession in nearly three decades.
“Markets are trading nervously today,” said Damian Rooney, director of equity sales at Argonaut.
The RBA used its daily money market operation to pump a record A$12.7 billion ($7.34 billion) into the banking system on Thursday, and has been flooding the system with cash all week.
Banks rose in early trade before reversing course to trade 0.3% to 3% lower. Financial services firm Macquarie Group tumbled 11.4% to its lowest since November 2016.
“It’s going to be some time before there is certainty as investors price in risk,” said James McGlew, executive director of corporate stockbroking at Argonaut.
Energy stocks continued to be weighed down by a plunge in oil prices.
The sub-index dived more than 6%, with Oil Search extending falls to hit its lowest in more than 15 years, while index heavyweight Woodside Petroleum dropped 7.5% to a near 16-year low.
Buy-now-pay-later firm Afterpay Ltd sunk 21.5% and was one of the biggest drags on the benchmark, as recession fears in its key markets raised questions about revenue growth, funding and loan losses.
In neighbouring New Zealand, the benchmark S&P/NZX 50 index fell 2.4%, or 222.45 points, to 9,232.44 as the total coronavirus cases rose to 28 and data showed that the economy slowed in the last quarter of 2019.
Casino operator SkyCity Entertainment slumped 17.1% to its lowest in nearly two decades, while adventure goods retailer Kathmandu Holdings Ltd gave up 18.7% in its twelfth straight session of drop. ($1 = 1.7301 Australian dollars) ($1 = 0.9175 euros)
Reporting by A K Pranav in Bengaluru; Editing by Subhranshu Sahu