Australian shares pared some of their early losses but still ended 1.2 percent lower on Monday, beaten down by Wall Street having its worst starting week in history and concerns about Beijing's ability to manage China's financial markets. The S&P/ASX 200 index crumbled 58.64 points to 4,932.2 at close. The benchmark shed 5.7 percent last week, its largest such loss since 2011 and the worst opening week on record.
Earlier in the day, it plunged 2.2 percent to a 2-1/2 year low but recouped some of the losses on late buying of banks and select stocks such as Carsales.com.au and Slater & Gordon. New Zealand's benchmark S&P/NZX 50 index dipped 0.9 percent or 55.28 points to finish the session at 6,102.83.
The absence of Tokyo for a holiday made liquidity even thinner, heightening volatility and sending investors to the safety of the yen and government bonds. "Ongoing concerns about China, the Federal Reserve and commodity prices, it's all one-way traffic at the moment, resulting in very negative sentiment," said Ben Le Brun, a market analyst at OptionsXpress, seeing key support for the index around 4,900.
Losses were across the board, but heavyweight resource sector was among the hardest hit with miner BHP Billiton at a fresh 10-year low. Rio Tinto skidded 4 percent to its weakest in 7 years. Investors sold the financial sector with Australia and New Zealand Banking Group, Westpac Banking Corp and Commonwealth Bank of Australia at least 1.5 percent lower. National Australia Bank plumbed its weakest levels since mid-2013, while Macquarie Group fell 3.6 percent.
Likewise, there was not much love across the Tasman Sea with New Zealand's benchmark NZX 50 index off 0.9 percent or 56.7 points to 6,101.410, heading for its fifth session of losses on Monday. Sky TV led losses, falling 2.12 percent whilst Fletcher Building lost 1.7 percent. Accounting software company Xero lost 1.14 percent, continuing to edge down after a rally in the final days of last year. The biggest gainer was Z Energy Ltd which rose 1.2 percent as investors sought bargains from the energy retailer's lower price after five consecutive sessions of falls.
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