Australian shares reversed early gains to fall 0.3 percent on Tuesday as investors fretted that a cash crunch could slow Chinese growth, but a weaker Australian dollar buoyed exporters, helping to cap losses. Flagship miners BHP Billiton Ltd and Rio Tinto Ltd lost 1.7 percent and 2.5 percent respectively, thanks to fears that tighter liquidity and slower growth in China could reduce its demand for iron ore.
The People's Bank of China said banks needed to do a better job of managing their cash and lending as the central bank attempts to move the world's second largest economy away from credit-driven investment. The S&P/ASX 200 index, which dropped 1.5 percent on Monday, finished the day 13.1 points lower at 4,656. It is up only 0.2 percent in 2013. New Zealand's benchmark NZX 50 index lost 1.1 percent or 47.1 points to finish at 4,317.
IG's chief market strategist Chris Weston said lack clarity about China and US monetary policy "should keep investors away for now." Stocks have been hit hard in recent sessions by concerns about the US Federal Reserve's plan to cut back on the money it pumps into the world's largest economy, causing sharp adjustments in global asset markets. Financials also helped mitigate losses. The Commonwealth Bank of Australia rose 0.6 percent and Westpac Banking Corp added 0.5 percent.
Comments
Comments are closed.