- Australian shares post biggest intraday drop since August
- Materials and financials biggest drags on the index
- NZ shares post biggest intraday drop since Nov. 2016
Australian shares recorded their biggest fall since August on Monday as broad-based losses dragged the benchmark into negative territory.
The S&P/ASX 200 index (xjo) fell 73.1 points or 1.2 percent to 6,048.3 by 0057 GMT following a 0.5 percent gain on Friday.
"I think the key driver is the U.S. jobs data we got on Friday night. The stock market is taking it as bad news because it is one of the key drivers of inflation and this just suggests potential higher inflation in the U.S. and will eventually lead to potential higher interest rates," said Ric Spooner, chief market strategist at CMC Markets.
U.S. job growth surged in January and wages recorded their largest annual gain in more than 8-1/2 years, bolstering expectations that inflation will push higher this year as the economy reaches full employment.
Mining stocks were among the biggest burdens on the index, with global miners BHP Billiton Ltd (BHP) and Rio Tinto Ltd (RIO) each shedding more than 2 percent. BHP's falls pulled the index down by about 10.3 points.
The mining index .AXMM saw its biggest intraday percentage loss since late June, with gold and copper prices dropping as the U.S. dollar strengthened on the unexpectedly strong employment data. [GOL/] [MET/L]
The Australian gold index .AXGD shed nearly three percent. Downer EDI (DOW), an integrated services business that designs, builds and runs infrastructure and facilities, fell around three percent after it said it would book an impairment on its mining-related business for the half-year to December 31.
Financials .AXFJ tracked their peers in the U.S., shedding more than one percent, in line with a more than two percent drop in the S&P Financial index .SPSY. Commonwealth Bank of Australia (CBA) dragged the benchmark about 3.9 points lower, while Westpac Banking Corp (WBC) took it down about 4.2 points.
Westpac said its stressed assets fell slightly in the three months to Dec. 31 and also announced plans to raise A$750 million ($592 million) in capital through the launch of new hybrid securities.
Consumer stocks were also lower, with diversified conglomerate Wesfarmers Ltd (WES) falling to its lowest since late October.
Wesfarmers said it expects A$1.3 billion ($1 billion) in writedowns for the first half of 2018, mostly against its newly acquired and loss-making British hardware division.
In New Zealand, the benchmark index fell about 1.6 percent on broad based losses, marking its biggest intraday percentage loss since November 2016.
The S&P/NZX 50 index (nz50) fell 1.6 percent or 131.4 points to 8,283.91.
Healthcare and consumer staples stocks led the declines, with Fisher & Paykel Healthcare Corp (FPH) losing about 2.9 percent, while a2 Milk Co (ATM) shed more than three percent.
A2 Milk was also the biggest drag on the benchmark, pulling it back nearly 20 points.
Media company NZME Ltd (NZM) fell after it said it would apply for leave to appeal the high court's decision to bar its merger with Fairfax Media Limited's (FXJ) New Zealand unit.
