January 8, 2020 / 1:04 AM / 18 days ago

Australia, NZ shares slip as rocket attack on Iraq base quells risk appetite

* ASX 200 opens higher, but slips after reports of rocket attack

* Financials, healthcare and iron ore miners tumble

* Gold stocks surge 3.8%, highest level since Oct. 2019

* Energy stocks at near 15-month higher as oil prices jump

By Rashmi Ashok

Jan 8 (Reuters) - Australian shares fell on Wednesday after Iran launched a major ballistic missile attack on U.S.-led forces in Iraq days after the killing of a Iranian commander, sparking worries of a wider war in the Middle East.

Just hours earlier, U.S. President Donald Trump said the United States was prepared for any attack by Iran and vowed to retaliate if the latter attacked any U.S. assets or Americans.

Giving up slim gains at open, the S&P/ASX 200 index shed 0.9% or 59 points to 6,768 by 0034 GMT. The benchmark had risen 1.4% on Tuesday, helped by a short lull in tensions.

“We really don’t know in what form, but we can anticipate that there will be escalation. I can only see more volatility going forward at this juncture,” said Brad Smoling, managing director at Smoling Stockbroking.

“This might just be the straw that broke the camel’s back,” he added, referring to the recent record highs U.S. stocks touched and broadly upbeat performance of global equities, which is now threatened by the growing tensions in the Middle East.

Risk-averse sentiment hurt financials most, with all of the “Big Four” heavyweight lenders falling. Westpac Banking Corp fell 1.1% while the biggest bank, Commonwealth Bank of Australia shed 0.8%.

Australia and New Zealand Banking Group and National Australia Bank gave up 1% each.

Healthcare stocks also retreated, with CSL, the benchmark’s fourth largest stock, falling 1.1%. Cochlear Ltd and U.S.-based Resmed Inc shed 2.1% and 1%, respectively.

The index’s two largest stocks, global miners BHP Group and Rio Tinto fell 1.1% and 1.3%, respectively, stepping up pressure on the index.

Safe-haven gold stocks surged nearly 3.8% to hit an over two-month high, with heavyweight Newcrest Mining adding 3.2%.

Northern Star Resources, Evolution Mining and Resolute Mining gained between 3.5% and nearly 6% each.

The energy sector traded at near 15-month high, as oil prices surged on the news. Woodside Petroleum tacked on 1.2% while smaller peer Santos climbed 2.5%.

In nearby New Zealand, the benchmark S&P/NZX 50 index fell 0.6% or 69.53 points to 11,560.33.

Air New Zealand Ltd was among top losers, down 2%, while dairy giant a2 Milk Company Ltd lost 0.5%. (Reporting by Rashmi Ashok in Bengaluru; Editing by Lincoln Feast.)

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