June 5, 2013 / 6:25 AM / 5 years ago

Australia shares hit 4-1/2-month lows after disappointing GDP

(Updates to close)

SYDNEY, June 5 (Reuters) - Australian shares sank 1.3 percent to a 4-1/2-month low on Wednesday as slower-than-expected first quarter growth and weakening demand for metals in China depressed sentiment.

The financial sector was hit hard. Westpac Banking Corp lost 2.6 percent while Australia’s fourth-largest bank Australia and New Zealand Banking Group tumbled 2.5 percent. Top lender Commonwealth Bank of Australia slipped 1.3 percent.

The S&P/ASX 200 index declined 65.6 points to finish at 4,835.2, its lowest close since January 25, according to the latest data. The benchmark rose 0.3 percent on Tuesday.

Australia’s economy posted a second straight quarter of moderate growth as a drop in business investment offset gains in trade and consumer spending at the start of 2013, a disappointing result that only reinforced the case for lower interest rates.

The disappointing data added to recent concerns about slowing growth in China and the outlook for the U.S. Federal Reserve’s stimulus programme, which have prompted some heavy selling of Australian equities.

New Zealand’s benchmark NZX 50 index fell 0.5 percent or 20.2 points to finish the session at 4,453.6. (Reporting by Thuy Ong; Editing by Shri Navaratnam)

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