Reuters: Hot Stocks: Australia shares hit 4-1/2 month lows on disappointing GDP, banks fall

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Australia shares hit 4-1/2 month lows on disappointing GDP, banks fall Jun 5th 2013, 06:46 Wed Jun 5, 2013 2:46am EDT (Adds details, comments) SYDNEY, June 5 (Reuters) - Australian shares slumped 1.3 percent to a 4-1/2 month low on Wednesday as slower-than-expected first quarter growth and weakening demand for metals in China depressed sentiment. The market, which was already under some selling pressure on Wall Street's overnight weakness, fell further after the soft GDP data. Australia's economy posted a second straight quarter of moderate growth as a drop in business investment offset gains in trade and consumer spending at the start of 2013, a disappointing result that only reinforced the case for lower interest rates. The financial sector was hit hard. Westpac Banking Corp plumbed 2.6 while Australia's fourth largest bank Australia and New Zealand Banking Group lost 2.5 percent. Top lender Commonwealth Bank of Australia dropped 1.3 percent. "The ASX is moving in the only direction it knows how in the last 9-12 trading days, and that's vertically south," said Evan Lucas, IG's market strategist. The S&P/ASX 200 index declined 65.6 points to finish at 4,835.2 after hitting an intraday low of 4,831.1. The benchmark rose 0.3 percent on Tuesday. The local market also underperformed the MSCI's broadest index of Asia-Pacific shares outside Japan, which was down 1.1 percent. The disappointing data added to recent concerns about slowing growth in China and the outlook for the U.S. Federal Reserve's stimulus programme, which have prompted some heavy selling of Australian equities. "The fact that we're not going to see any stimulus measures from the RBA until at least July all put downward pressure in a macro, top-down view, rather than any stock-specific reason," said IG's Lucas. The Reserve Bank of Australia cut interest rates to a record low of 2.75 percent in May and said this week it was ready to ease again if needed. Markets have priced in a cut to 2.5 percent by October <0#YIB:>. Miners BHP Billiton Ltd and Rio Tinto Ltd each tumbled 1.4 percent on growing worries of a demand-led downturn in top consumer China. Growth in China's steel demand is expected to slow to a near-standstill in 2013, the head of the country's biggest listed steelmaker said on Tuesday, adding to pressure on iron prices after a 17 percent fall in May. Shares in Crown Ltd tumbled 2.3 percent in sympathy with the broad-based selling. The casino concern, controlled by James Packer, is in talks with a Sri Lankan partner to build a $350 million and leisure resort in the Indian Ocean island nation, as the Australian gambling tycoon looks to expand his global reach. U.S. stocks ended lower on Tuesday, resuming their recent decline as investors sold growth-oriented sectors on concerns the Fed may slow the pace of its economic stimulus. New Zealand's benchmark NZX 50 index fell 0.5 percent or 20.2 points to finish at 4,453.6. (Reporting by Thuy Ong, additional reporting by Michael Sin; Editing by Shri Navaratnam) Link this Share this Digg this Email Reprints

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