October 19, 2018 / 5:59 AM / a month ago

Australian, NZ shares dragged down by weak Chinese GDP data

(Updates to close)

Oct 19 (Reuters) - Australian shares edged lower on Friday as China posted its weakest economic growth since the global financial crisis, though the market was off its morning lows as Beijing pledged more policy support to mitigate risks from a trade row with the United States.

The S&P/ASX 200 index eased 0.05 percent to 5,939.5, recouping most of the early losses. The benchmark is set to gain 0.7 percent for the week, snapping two straight weeks in the red.

China’s economy grew 6.5 percent in the third quarter from a year earlier, missing expectations and coming in slower than 6.7 percent in the second quarter for its weakest quarterly performance since early 2009.

Chinese policy makers were quick to reassure markets, pledging more steps to support growth in the world’s second biggest economy - Australia’s largest trading partner and a key source of its massive export earnings.

The metals and mining index dropped 0.2 percent, with its top constituent BHP closed lower for a third straight day, down 0.3 percent.

Metal prices were down on concerns slowing growth from resource hungry China will likely dampen demand.

South32 fell 2.3 percent to its lowest level in more than a month, while Fortescue Metals Group declined 2.3 percent as well.

Financial stocks, which have been pummelled by revelations in a high-profile inquiry of widespread misconduct in the sector, closed higher. The sector also added over 1 percent this week to end a three week slide.

National Australia Bank said about 300 staff have been fired or left the company after internal investigations into wrongdoings, the company’s Chief Executive Officer said.

Australia’s number four lender closed 0.3 percent lower.

New Zealand’s benchmark S&P/NZX 50 index slid 1.2 percent or 108.33 points to finish the session at 8,802.26.

Broad weakness among heavyweight stocks, such as a2 Milk Company and Air New Zealand, which closed down 1 percent and 1.3 percent, respectively, weighed on the market. (Reporting by Nikhil Kurian Nainan in Bengaluru Editing by Shri Navaratnam)

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