October 3, 2018 / 6:50 AM / 18 days ago

Australian shares propped up by resource stocks; NZ falls

(Updates to close)

By Nikhil Nainan

Oct 3 (Reuters) - Australian shares got a lift from strong gains in resource-related stocks on Wednesday, helped by higher gold and metal prices, while financials ended lower despite earlier gains.

The S&P/ASX 200 index rose 0.3 percent to 6,146.1 at the close of trade. The benchmark fell 0.8 percent on Tuesday.

Mining stocks found support from firmer overnight metal prices, despite those prices easing in Asian trade.

Asian markets have been muted by a week-long break in China, a major resources consumer.

Global miners BHP and Rio Tinto were among the biggest gainers, rising 1.1 percent and 1.8 percent respectively.

Gold prices touched a one-week high as investors sought safe-haven assets. The gold sub-index surged about 4 percent in the session to its highest in slightly over a week.

St Barbara rose 7.4 percent, while Evolution Mining and Newcrest Mining gained 3.8 percent and 3.3 percent respectively.

Financials extended their losses for a third straight session, despite managing to eke out some gains earlier in the session.

Three of the ‘Big Four’ banks were in negative territory, while Commonwealth Bank of Australia managed to rise 0.1 percent.

The weakness among financials came in the wake of scathing interim findings from a powerful Royal Commission inquiry into the sector, which were published late last week.

Following damaging revelations from the inquiry, Freedom Insurance Group on Tuesday said it would slash its workforce by more than half and stop the sale of direct insurance. It also announced the departure of its chief executive and chief financial officer.

Freedom shares plummeted 25 percent on Wednesday to the lowest in a week.

“Markets are concerned about outlook for its business, and see some risk that their business model might be wiped out,” said Michael McCarthy, chief strategist at CMC Markets and Stockbroking.

New Zealand’s benchmark S&P/NZX 50 index dropped 0.4 percent or 32.64 points to finish the session at 9,293.95.

Index heavyweight a2 Milk Company was the biggest drag, sliding 2.6 percent, closing at its lowest since August 20.

Fletcher Building fell 1.5 percent, after its takeover offer for Steel & Tube Holdings Ltd was rebuffed by the company, which said the offer undervalued the business and faced significant regulatory hurdles. (Reporting by Nikhil Kurian Nainan in Bengaluru; editing by Eric Meijer)

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