Australia shares end lower, miners sag on China trade slump

[BENGALURU] Australian shares ended slightly lower on Monday, as mining and energy stocks declined after the country’s top trading partner China reported a shock contraction in imports and exports.

The S&P/ASX 200 index finished 0.02 per cent lower at 5,773.40, its second consecutive session of losses, after earlier trading in positive territory.

China’s exports unexpectedly fell 4.4 per cent in December from a year earlier, the biggest monthly drop in two years, while imports too contracted, falling 7.6 per cent to decline the most since July 2016.

Economic headwinds in the world’s second-largest economy tend to have a particularly negative effect on Australia’s metals and mining sectors.

The ASX Metals and Mining index ended 0.3 per cent lower as copper and aluminium prices on both the London and Shanghai exchanges dropped after China’s disappointing trade figures.

Steel manufacturer Bluescope Steel Ltd was the top per centage loser in the metals index, closing 5.2 per cent lower, while mining behemoths BHP Group and Rio Tinto finished the session down 0.2 per cent and 0.3 per cent, respectively.

The ASX Energy index was also hit by lower oil prices and shed 0.8 per cent.

Oil prices fell by almost 1 per cent, with Brent crude slipping below $60 per barrel, after weak data in the second-largest crude oil consumer hurt sentiment.

Coal miner Whitehaven Coal Ltd lost 3.6 per cent while energy services firm Worleyparsons Ltd shed more than 2 per cent at the close.

Shares of conglomerate Wesfarmers lost 2.2 per cent after it flagged a decline in earnings at its department store unit, hurt by a slowdown in sales at Kmart.

Wesfarmers, which was among the top drags on the benchmark, also said it was likely to record a gain of at least A$3 billion ($2.16 billion) from a spree of disposals that includes a spinoff of the country’s second-biggest grocery chain, Coles Group.

Meanwhile, the financial sector, which consists of some of the world’s most profitable banks, climbed 0.4 per cent and was the top boost to the benchmark.

Westpac Banking Corp gained 0.5 per cent even as a senior executive of the No.2 lender said Australia’s big banks may struggle to raise the amount of extra capital they require under new rules proposed by the banking regulator.

The rest of the country’s “Big Four” firmed between 0.4 per cent and 0.5 per cent.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index closed 0.1 per cent, or 8.97 points, higher to finish the session at 8,968.55.

Freight operator Port of Tauranga Ltd was the top per centage gainer, putting on 1.8 per cent at Monday’s close.

REUTERS