Australian shares slip on financials, consumer staples; NZ inches down

Mon, 19th Mar 2018 01:30

* Financials, consumer staples pull Aussie shares down

* Oil price rally boost energy, material stocks

* NZ hurt by telecoms

By Christina Martin

March 19 (Reuters) - Australian shares erased early gains toslip on Monday as financials and consumer staples dragged theindex lower, with broader Asian markets jittery ahead of theU.S. Federal Reserve meeting later in the week.

The S&P/ASX 200 index inched down 0.2 percent, or10.6 points, to 5,938.8 by 0112 GMT. The benchmark ended 0.5percent up on Friday.

Investors were cautious in anticipation of the two-dayFederal Open Market Committee meeting later this week, at whichthe U.S. central bank is expected to raise interest rates forthe first time this year.

Financial stocks in Australia fell for a fifthstraight session, down as much 0.5 percent, with the 'Big Four'banks sliding between 0.2 percent and 0.8 percent.

Consumer staples also saw stocks slip, with Wesfarmers Ltdbeing the biggest loser on the sub-index.

"Wesfarmers came out on Friday and said they were going tosell off their Coles supermarket division. The stock was up verystrongly and it just seems as though it is giving back some ofthose gains. That would be the major reason why consumer staplesare weaker," said Christopher Conway at the Australian StockReport.

Meanwhile, energy stocks edged as much as 1.5percent higher, posting their biggest intraday percentage gainin a week.

Beach Energy Ltd, Caltex Australia Ltd andWoodside Petroleum Ltd all showed gains ranging from asmuch as 1.3 percent to 2.5 percent.

Materials stocks hit their highest in over a week,up as much as 0.7 percent and on track for a fourth straightsession of gains, with index heavyweights BHP Billitonand Rio Tinto Ltd jumping 0.8 and 0.9 percent,respectively.

Oil prices jumped on Friday, with Brent crude futureshitting their highest in more than two weeks, while U.S. stockprices rose on strong industrial output numbers.

"Materials are a bit of a funny one and that is because ithas BHP in it of course. BHP has a lot of exposure to oil; it isthe biggest oil producer in Australia, bigger than Wooodside andall the other oil-only commodities companies, and we all know ithas got a huge weight," said Conway.

"It is BHP's oil exposure which is giving it a gain anddriving the rest of the (materials) sector, overcoming theweakness in iron ore prices."

Materials gained in Australia despite a slide in iron oreand base metal prices.

New Zealand's benchmark S&P/NZX 50 index inched down0.2 percent, or 16.56 percent, to 8,460.52, hurt by telecoms andindustrials.

The biggest drag on the main index was telco Chorus Ltd, which fell as much as over 8 percent, its biggest dropin six months.(Reporting by Christina Martin in Bengaluru; Additionalreporting by Aditya SoniEditing by Eric Meijer)