February 9, 2018 / 6:26 AM / 5 months ago

Australia shares hit by Wall St gloom;NZ posts biggest weekly drop in nearly 8 yrs

* Aussie shares fall 0.9 pct

* Financials and materials lead the decliners

* NZ drops 1 pct, posts biggest weekly drop in 8-yrs (Updates to close)

Feb 9 (Reuters) - Australian shares slumped to a near four-month low on Friday as Wall Street was hammered by renewed selling on worries of higher inflation and interest rates.

The S&P/ASX 200 index fell 0.9 percent or 52.700 points to 5,838.000 at the close of trade, giving up more than its modest 0.2 percent gain on Thursday. The benchmark declined 4.6 percent on a weekly basis, its biggest in over two years.

U.S. stocks tumbled around 4 percent on Thursday in another dramatic session, confirming a correction that has thrown the market’s near nine-year bull run off course.

The latest selloff in global markets was triggered by last week’s U.S. payrolls data showing strong wages growth, stoking fears the Federal Reserve would raise rates at a faster pace than expected. The anxiety spread to financial markets worldwide and routed equities, as the spectre of inflation suggested global central banks will shut off the liquidity tap that has underpinned a robust rally in riskier assets.

Tracking their U.S. counterparts, banks led the decline locally, with the Australian financial index giving up 0.5 percent.

Macquarie Group Ltd, the country’s biggest investment bank, lost 2.5 percent, while Australia and New Zealand Banking Group Ltd fell 0.4 percent.

Materials stocks were also under the cosh, with mining stalwart BHP declining 1.1 pct to a seven-week low.

Mining stocks were also hurt by a weakening in copper and aluminium prices.

Myer Holdings Ltd fell to a record low and was the biggest percentage loser on the benchmark with a 9.3 pct slide, after the department store operator issued a profit warning. It forecast first-half profit to fall more than 34 percent and flagged a possible impairment charge.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index extended losses to a fourth consecutive session as it fell about 1 percent or 84.770 points to finish the session at 8,092.370.

The index lost 3.8 percent for the week, its biggest weekly decline in nearly eight-years.

Industrials and health care stocks led the fall, with Fisher & Paykel Healthcare Corp Ltd slipping 1.9 pct to an over 2-1/2 month low, while Auckland International Airport Ltd dropped 1.2 pct to a eleven-week low.

Reporting by Aditya Soni in Bengaluru;Editing by Shri Navaratnam

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