April 23, 2020 / 7:51 AM / a month ago

Australia shares close little changed on grim business activity survey

* Lynas sees best day in over a year, up 16.9%

* Australian healthcare, financial stocks down

* New Zealand shares settle slightly higher (Updates to close)

By Arpit Nayak

April 23 (Reuters) - Australian shares closed little changed on Thursday as a survey showing grim business activity data overshadowed a surge in exports, while losses in healthcare and financial stocks eclipsed gains in miners.

The S&P/ASX 200 index settled 0.1%, or 4.1 points, lower at 5,217.10, after rising 1.2% in early trade on hopes that the U.S. House of Representatives would pass a fresh $484 billion relief package to aid small businesses amid the coronavirus pandemic.

Australian shares pared gains after a survey showed the country’s overall activity index plunged to a record low of 22.4 in April, compared with 40.7 in March, implying a contraction. Virus-driven lockdowns and social distancing hit the services sector hardest.

“The services PMI was significantly woeful - reality bites - 19.6 and will get worse,” said Henry Jennings, senior analyst at Marcustoday.

The dire manufacturing and services survey data took the shine off a 29% spike in goods exports last month as the resource-rich country shipped more iron ore to China and more gold to Hong Kong and the UK.

Jennings said the banking sector remained an issue as earnings inched closer. “The economic numbers that are more up to date are pointing to a big slowdown and reality is eroding hope,” he said.

Heavyweight financials ended 0.5% lower, with the “Big Four” banks all posting losses. Top lender Commonwealth Bank of Australia gave up 0.7%.

Healthcare stocks were the biggest drag on the index, declining 2%. Industry giant CSL accounted for a large chunk of the losses, shedding 2%.

However, an overnight surge in bullion prices and strong recovery in iron ore sent miners up 2.7%. The gold index climbed 4.3%.

BHP, the world’s largest miner, climbed 2.7%, while iron ore miner Fortescue Metals Group added 1.1%.

Meanwhile, Lynas Corp, the world’s largest rare earths miner outside China, saw its best day in more than a year to finish 16.9% higher, after it won funding to establish a U.S. heavy rare earths facility in Texas.

The index of energy stocks rallied 2.2% after three straight sessions of losses, as oil prices recovered from over 20-year lows amid signs of a scale-back in production.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index rose 0.3%, or 28.44 points, to finish at 10,446.11.

Local shares of lenders Australia and New Zealand Banking Group and Westpac Banking Corp added 1.8% and 0.25%, respectively. (Reporting by Arpit Nayak in Bengaluru; Editing by Subhranshu Sahu)

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