Australia shares drop as vaccine trials halt, stimulus hopes fade

Mainfreight

14/10/2020 06:52

* Johnson & Johnson pauses COVID-19 vaccine trials 
    * Impasse in U.S. fiscal aid package talks sours sentiment
    * Lower oil prices hurt Australian energy stocks

 (Updates to close)
    By Nikhil Subba
    Oct 14 (Reuters) - Australian shares closed lower on
Wednesday, with heavy selling in financial and energy stocks, as
halted COVID-19 vaccine trials and an elusive U.S. coronavirus
relief package dented risk appetite.
    The S&P/ASX 200 index  .AXJO  slipped 0.3% to 6,179.20 at
the close of trade. The benchmark closed 1% higher on Tuesday. 
    Global markets took cue as major indexes on Wall Street
closed the previous session in the red, after COVID-19 vaccine
trials were paused by Johnson & Johnson  JNJ.N  due to an
unexplained illness in a study participant.  urn:newsml:reuters.com:*:nL4N2H406N
    Diminishing hopes for the passage of a U.S. coronavirus
relief bill also added to the gloom after House Speaker Nancy
Pelosi rejected the $1.8 trillion proposal from the White House.
    "It's (U.S. stimulus) become a fairly politically charged
event, and I'm not sure that the Democrats are going to give Mr.
Trump a free kick and pass anything stimulus wise for the next
20 days," said Damian Rooney, director of equity sales at
Argonaut.
    The heavyweight financial sector  .AXFJ  stocks finished
about 1% lower, with the so-called "Big Four" banks closing in
the red.
    "Few brokers are starting to look at the banking sector
after its big run, so I think there's a few profit takers
there," Henry Jennings, a senior analyst and portfolio manager
at Marcustoday said.
    Energy stocks  .AXEJ  slid 0.9% at close, after oil prices
slipped, with Woodside Petroleum  WPL.AX  easing 1.2% and Oil
Search losing 1.7%. 
    Limiting losses, the healthcare sector  .AXHJ  advanced
1.3%, with the help of CSL Ltd's  CSL.AX  1.4% gain and Sonic
Healthcare  SHL.AX  closing 2.3% firmer.
    CSL lifted its FY2021 net profit to be between $2.17 bln and
$2.27 bln at constant currency, compared with its initial
forecast of $2.10 bln to $2.27 bln  urn:newsml:reuters.com:*:nL4N2H507G
    Meanwhile, Sonic Healthcare marked its highest close after
reporting first-quarter core earnings of A$580 million, up from
A$340 million last year.  urn:newsml:reuters.com:*:nASN000FCU
    In New Zealand, the benchmark S&P/NZX 50 index  .NZ50  rose
0.72% to yet another closing high of 12,543.61.
    Top gainers were Mainfreight Ltd  MFT.NZ , up 5.77%,
followed by EBOS Group Ltd  EBO.NZ , gaining 3.46%.

 (Reporting by Nikhil Subba in Bengaluru, Editing by Sherry
Jacob-Phillips)
 ((Nikhil.Subba@thomsonreuters.com; Reuters Messaging:
Nikhil.Subba.thomsonreuters.com@reuters.net))
 
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