Australian shares slipped 0.8 percent on Thursday as a fall in iron ore prices weighed on the resources sector, while nerves over next week's Reserve Bank of Australia interest rate policy meeting kept banks under pressure. The benchmark S&P/ASX 200 index dropped 48.6 points to 5,790 at the close of trade. The index touched a seven-week low to be down 1.7 percent for the month, its largest fall this year.
In contrast, New Zealand's benchmark NZX 50 index rose 0.9 percent or 50.5 points to finish the session at 5,791.3. It has shed 0.7 percent this month. "A couple of days ago we were pushing for the 6,000 level. Now we're seeing a fairly decent reversal," said Chris Weston, strategist at IG in Melbourne. "Valuations have got to a stage where we needed to see fresh inspiration from around the world. We need to see global growth pushing up. We need to see earnings actually looking to go up."
Instead, data overnight showed US economic growth nearly stalled in the first quarter and the Federal Reserve downgraded its view of the US economy. Mining shares were among the big losers after a recent rally in iron ore prices came to an abrupt halt. Fortescue Metals fell 8.2 percent, while Mineral Resources slid 3.6 percent. The big four banks also suffered another session of steep declines, led by a 3.0 percent fall in Westpac.
Investors appeared to be taking profits in the sector amid high uncertainty about whether the Reserve Bank of Australia will ease again. Debt markets imply a 50-50 chance of a cut at the May 5 meeting, down from as high as 68 percent earlier this month. Earlier in the day, the Reserve Bank of New Zealand said it was open to cutting interest rates if domestic demand weakens and inflation pressures fall.
Spark rose 1.9 percent, boosted after the country's biggest telecommunications provider announced it was selling off more non-vital assets, while casino operator SkyCity Entertainment rose 2.4 percent. Xero slumped 3.3 percent to a two-month low of NZ$19.97.
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