Australia Shares End Lower on China Growth Concerns, Data

   By Robb M. Stewart 
 

MELBOURNE, Australia--Australian shares fell for a third straight day Friday, dipping ahead of a long weekend as stocks across the region edged lower on signs of weakness in China's economy and amid a flurry of corporate earnings.

"The wobbly start to the year for share markets continued over the past week," said Shane Oliver, head of investment strategy at AMP Capital in Sydney, who nevertheless expects shares to perform well as profits pick up and interest rates remain low.

The S&P/ASX 200 fell 0.4% to 5240.9, leaving the benchmark index down 1.2% for the week as big banks and retailers lost ground. The market will be closed Monday for Australia Day.

A spat of economic releases weighed on investor sentiment, led by weaker-than-anticipated manufacturing data and cooling economic growth out of China, as well as domestic inflation data that suggested Australia's central bank has no pressing need to cut interest rates further.

Mr. Oliver, who has forecast the ASX 200 to rise to about 5800 by the end of the year, said he continues to believe that the Reserve Bank of Australia will leave interest rates on hold until a modest hike late in 2014.

Financial stocks weighed heavily on the Australian market Friday, with Westpac Banking, National Australia Bank and Australia & New Zealand Banking each down 1%.

Tom Piotrowski, market analyst at Commonwealth Securities, said discretionary retailers were also under pressure after the inflation data for the December quarter and trading updates from several companies.

The Reject Shop slumped 32% following an update in which it cited weak trading in the lead-up to Christmas and discounting for soft sales in its fiscal first half. Among others, department store chains Myer and David Jones were down 4.2% and 4%.

Healthcare shares finished the day broadly flat after contrasting earnings reports. CSL rose almost 1.1% after U.S. peer Baxter International forecast 2014 sales growth of 9%-10%, while ResMed shares dropped 4.9% after disclosing disappointing quarterly revenue at its American operations.

Bucking the broader trend, Newcrest Mining shares recovered 3.8% as investors digested news a day earlier that the gold producer is aggressively cutting spending.

Write to Robb M. Stewart at [e-mail]