Australian shares drop, but set for best weekly gain since 2011; NZ higher

* Benchmark set for best weekly gain since 2011

* Financials, miners lead decline

* Woodside Petroleum drops, cuts spending

By Pranav A K

March 27 () – Australian shares fell on Friday as investors booked profits amid rising coronavirus cases at home, but the index was set for its best weekly gain since 2011 as policymakers launched a raft of stimulus efforts to buttress the global economy.

Federal and state leaders of the country are slated to meet later in the day, as a sharp rise in infections boosted expectations the largest states could enforce a wide-ranging lockdown to contain the pandemic.

The S&P/ASX 200 index was down 1.6%, or 81.70 points, at 5,031.6 by 0152 GMT, having risen 2.3% on Thursday.

The index had gained as much as 2.4% in early trade, in line with global peers, as a spike in U.S. unemployment filings raised bets of further bets of even more stimulus.

“The global guys are the buyers boosting markets on the open … then local guys are selling to lock in profit,” said Mathan Somasundaram, a market portfolio strategist at Blue Ocean Equities.

Still, the benchmark has gained 5.3% so far this week, as the Reserve Bank of Australia made a historic foray into quantitative easing and the United States looked all but certain to pass a $2 trillion stimulus package.

“Are we past the worst? Economically we are just getting started, clearly, but equity markets dance to a different beat and it is true that the most vigorous forced selling appears to be over now the Fed has brought out the bazookas,” ANZ Research said in a note.

On Friday, the selling was concentrated in mining stocks and financials, with BHP Group dropping 2.7% and the “Big Four” banks sliding between 1.8% and 2.6%.

Even supermarket chains, one of the bright spots during the past few weeks due to the pandemic-fuelled buying frenzy, were not spared. Woolworths Group and Coles Group Ltd skipped 2.5% and 3.6%, respectively.

The energy sector dropped more than 2%, pulled down by losses in the country’s top oil and gas producer Woodside Petroleum, which fell up to 2.6%.

Earlier in the day, Woodside said it would defer investment decisions on a number of its major projects, and slashes total forecast spending in 2020.

In New Zealand, the benchmark S&P/NZX 50 index rose 1.6%, or 154.3 points, to 9,786.7, and was set for its best weekly gain on record.

Oceania Healthcare, the top percentage gainer in the index, jumped 15.5%, while Vista Group added 12.9%. (Reporting by A K Pranav in Bengaluru; Editing by Aditya Soni)

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