March 10, 2020 / 1:27 AM / 20 days ago

Australian shares dip into bear market territory

* ASX benchmark index falls about 4% in early trade

* Financials, healthcare stocks weigh on ASX200

* New Zealand stock index declines nearly 3%

By Aby Jose Koilparambil

March 10 (Reuters) - Australian stocks plunged into bear market territory on Tuesday, as rising economic risks from the fast-spreading coronavirus and a recent plunge in oil prices clouded the global economic outlook.

The S&P/ASX 200 index fell as much as 3.9% to its lowest since Dec. 27, 2018, before cutting losses to trade 0.7% lower at 5,720.60 by 0021 GMT on bargain-hunting. At the session low, the index was down more than 23% from a record high hit in February.

“I think there is a little bit of bargain-hunting around. Yesterday was a pretty brutal day, so people are happy to breathe a sigh of relief,” said Henry Jennings, a senior analyst and portfolio manager at Marcustoday Financial Newsletter.

Fears of a global recession due to the coronavirus outbreak coupled with a near 25% slump in oil prices on Monday have sent investors into panic mode, with Wall Street witnessing overnight its biggest one-day loss since the 2008 financial crisis.

Crude prices suffered their biggest daily rout since the 1991 Gulf War in the previous session, as top producers Saudi Arabia and Russia began a price war that threatens to overwhelm global oil markets with supply.

Meanwhile, the Australian government prepares a fiscal stimulus to ward off recession risks as the virus outbreak has hit confidence and consumer spending. The tally of virus cases rose to more than 80.

Heavyweight financials accounted for most of the losses, with all the Big Four lenders declining in a range of 0.2% of 1.4%.

Healthcare stocks fell 1.5%, pulled down mainly by benchmark major CSL Ltd and Nanosonics Ltd, both losing about 2% each.

Losses in bullion stocks weighed on the metals and mining index. Gold miners Resolute Mining and Evolution Mining lost more than 6% each.

“Lots of people have been hiding in gold and when it’s time to come out from under the bed, you would see a sell-off in gold as people move back into riskier equity assets as they are waiting for a buying opportunity,” added Jennings.

Diversified miner Rio Tinto, however, gained about 0.5% following heavy losses in the previous session, while top player BHP Ltd traded little changed.

Energy stocks gained more than 3% on higher crude oil prices, with Cooper Energy and Beach Energy tacking on about 7% each.

New Zealand’s benchmark S&P/NZX 50 index extended losses, shedding nearly 3%. Movie software maker Vista Group was the top percentage loser, declining about 10%. (Reporting by Aby Jose Koilparambil and additional reporting by Pranav AK in Bengaluru; Editing by Subhranshu Sahu)

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