Australia shares steady after a week of wild swings; NZ down

By Shashwat Pradhan

July 3 (Reuters) – Australian shares were flat on Monday as
gains in financials and energy stocks were offset by declines in
healthcare and the real estate sector and investors exercised
caution following last week’s wild swings on the benchmark.

Australian shares fell 1.7 percent on Friday, recording
their biggest percentage fall since November 2016, in
broad-based sell-off, following a slump on Wall
Street.

However, the S&P/ASX 200 index rose slightly by
1.306 points, or 0.02 percent, to 5,722.8 by 0315 GMT on Monday.

“The market is fairly soft today and the volumes are low.
Looks like we have been hit by some top-ten selling, that is
selling of futures, which is weighing on the market,” said
Michael McCarthy, chief market strategist at CMC Markets,
referring to ten largest companies in the index.

Financials drove the gains on the benchmark with Westpac
, Commonwealth Bank of Australia, National
Australia Bank and Australia New Zealand Banking Group
all in the black.

Sentiment was boosted by a survey that showed that
Australia’s manufacturing and service sectors both enjoyed
strong activity in June with upbeat demand encouraging more
hiring.

Meanwhile, the energy sector was among the biggest gainers
on the benchmark after oil prices edged up on Monday, supported
by the first fall in U.S. drilling activity in months, although
rising output from OPEC despite a pledge to cut supplies capped
gains.

Oil producer Santos Ltd was up 0.8 percent while
Beach Energy Ltd jumped 3.5 percent.

In other stocks, Australia’s biggest retailer by sales
Wesfarmers Ltd climbed 1 percent.

The Healthcare sector was the biggest drag on the index,
with biotech firm CSL Ltd slipping more than 1 percent.

“CSL is just pulling back from an all-time record high, so
its not unusual to see a little bit of correction in it,”
McCarthy added.

Real estate stocks also weighed on the benchmark with
Scentre Group and Stockland Corp Ltd slipping
more than 1 percent each.

Home prices in Australia’s major cities rebounded in June
after a pullback the month before, but there were early signs
the market was cooling as regulators tightened the screws on
leveraged property investors.

Among the other big losers was Fairfax Media, which
slumped as much as 16.8 percent to a near-four month low after
it said it had ceased discussions with two U.S private equity
suitors, undermining investor expectations for a bidding war for
Australia’s oldest newspaper publisher.

New Zealand’s benchmark S&P/NZX 50 index edged 0.1
percent or 4.32 points lower to 7,607.12.

Fisher Paykel & Healthcare accounted for most of
the losses, falling about 1 percent.

Ebos Group and Chorus Ltd were the other
major losers on the index, shedding 1.6 percent and 1.2 percent
respectively.

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(Reporting By Shashwat Pradhan in Bengaluru; additional
reporting by Sindhu Chandrasekaran; Editing by Christian
Schmollinger)

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