Australia shares extend losses as financial and energy stocks drag
09:12, 17 August 2021
Australian shares extended losses on Tuesday dragged by banking and energy stocks as investors fretted over the economic implications of rising COVID-19 cases and prolonged lockdown in the country.
The benchmark S&P/ASX 200 index fell 0.9% to 7,511 points on Tuesday. The index had closed lower at 7,582.50 points a day earlier.
On Monday, police set up roadblocks to restrict citizen movement in Sydney as Australia’s largest city recorded its highest daily COVID-related death toll.
Westpac sees lower margins
On Tuesday, financial stocks led declines in Australia as Westpac Banking emerged as one of the most heavily traded stocks on the S&P/ASX 200 Financials sub-index after announcing its results.
Westpac shares closed 1.3% lower on Tuesday after the bank said it expects margins in the second half of 2021 to be lower.
The financials sub-index lost 1.7% with Australia’s largest company in terms of market capitalisation Commonwealth Bank of Australia falling 3.5%.
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BHP dips before results
Australia-listed shares of BHP Group dipped 1.4% ahead of the global miner’s full-year earnings announcement during after-market hours.
The country’s mining and metals sub-index slipped 1.5%, while the energy sub-index declined 1.3% on Tuesday.
Natural gas company Santos weakened 0.8% despite announcing record half-yearly production and sales volume and more than doubling its interim dividend.
KOSPI’s eight-day losing streak
Elsewhere, South Korea’s KOSPI index ended the day in the red for an eighth straight session, falling 0.9% on Tuesday.
Markets in South Korea were weak coming off an extended weekend after its largest trade partner China posted disappointing factory and retail growth for July on Monday.
Index heavyweights Samsung Electronics and Naver Corp fell 0.3% and 1.8%, respectively.
KRW lowest since September 2020
South Korean won hit a near one-year low on Tuesday as the currency fell 0.8% against the greenback.
“We believe upside momentum on USD/KRW may continue in the near term on concerns over Korea’s memory sector, equity market weakness and foreign equity outflows, US Fed tapering concerns, and (Bank of Korea) BOK policy risk and (Foreign exchange) FX bias,” Nomura said in a note.
Bank of Korea signalled a hawkish tone in July, hinting that it may deliver a rate hike in the second half of the year to rein in rising inflation.
Malaysia rebounds
Meanwhile, Malaysia’s benchmark FTSE Bursa Malaysia KLCI index was the biggest gainer in APAC on Tuesday.
The index rose 1.4%, its biggest percentage gain since February 2021, after Malaysia’s prime minister Muhyiddin Yassin resigned a day earlier.
Bourses in Tokyo and Singapore fell 0.4% and 0.9%, respectively, while Indonesian markets were closed for holiday.
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