Australia shares slightly weaker after Fed minutes; NZ nudges higher

By Shashwat Pradhan

July 6 (Reuters) – Australian shares were shaky on Thursday,
with gains in healthcare and real-estate stocks offset by losses
in the banking sector, after the Federal Reserve’s policy
minutes showed a lack of consensus on the future pace of
interest rate increases.

The S&P/ASX 200 index dipped 0.1 percent or 2.7
points to 5,760.6 points by 0243 GMT.

Financial stocks were the biggest drag with the Big Four
banks – Westpac, Commonwealth Bank of Australia
, National Australia Bank and Australia New
Zealand Banking – all drifting lower.

Minutes from the Fed’s last policy meeting released on
Wednesday showed policymakers increasingly split on the outlook
for inflation and how it might affect the future pace of
interest rate rises.

The details of the meeting, at which the U.S. central bank
voted to raise interest rates, also showed that several
officials wanted to announce a start to the process of reducing
the Fed’s large portfolio of Treasury bonds by the end of August
but others wanted to wait until later in the year.

“All in all, the minutes essentially show that these
officials do not seem to have a clear picture of where things
are really heading, and what the appropriate policy calibration
will be,” OCBC Bank said in a note.

Market sentiment was also dented by oil prices which
plummeted about 4 percent on Wednesday, ending their longest
string of daily gains in more than five years, as rising OPEC
exports and a stronger dollar spurred selling.

Among energy stocks, Beach Energy Ltd fell 1.3
percent while WorleyParsons Ltd was down 2.1 percent.

Meanwhile, the world No. 1 stand-alone wine company Treasury
Wine Estates Ltd fell as much as 2.1 percent to touch a
near two-month low.

Despite the losses on the benchmark during the day,
advancing issues outnumbered declining ones by a 1.2-to-1 ratio.

Sentiment in some of the sectors was boosted by data showing
Australia’s trade surplus rebounded sharply in May as coal
shipments recovered faster than expected from cyclone
disruptions, putting exports back on track to add to economic
growth in the quarter.

Among the gainers, biopharma giant CSL Ltd climbed
1.8 percent while retailer Wesfarmers was up 1.1
percent.

New Zealand’s benchmark S&P/NZX 50 index edged 0.2
percent or 13.27 points higher to 7,608.94.

The utilities sector drove the index higher and accounted
for more than one-fourth of the gains.

Contact Energy Ltd and Mercury NZ Ltd were
among the big gainers in the sector, rising 1.5 percent and 1.3
percent, respectively.

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(Reporting By Shashwat Pradhan in Bengaluru; Editing by Sam
Holmes)


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