Australian shares fell on Wednesday, dragged down by concerns over devaluation of the Chinese yuan and as the mining sector was hit by a reduced forecast for metal prices.
The S&P/ASX 200 index lost 41.929 points, or 0.8 percent, to 5,431.300 at 0141 GMT. Earlier, it touched 5,428, its lowest level in a month. The benchmark fell 0.7 percent on Tuesday.
China, Australia’s largest trading partner, shocked global markets on Tuesday by devaluing its currency after a run of poor economic data.
“It’s having a huge impact. Markets the world over really hate uncertainty and Australia’s economic future is so closely intertwined with what’s happening in China,” said Chris Conway, head of research and trading at Australia Stock Report.
The mining sector led losses, dropping 3.2 percent after oil and iron ore prices dropped overnight and Morgan Stanley lowered its 2015 metals forecast.
Rio Tinto Ltd was down about 5.6 percent while Fortescue Metals was off 8.2 percent.
Westpac was up 0.6 percent, though most major banks edged down, with NAB losing 0.7 percent.
Share trading advisory service Market Matters said it expected the Australian banking sector to decline further by between 3 percent and 5 percent and that it would be a keen buyer at those levels.
Investment service provider Computershare Ltd slumped as much as 11.7 percent after the company said its full year net profit was down almost 40 percent.
Casino operator Echo Entertainment Group Ltd fell as much as 4.9 percent after saying its capital investment works would impact its FY 2016 revenue.
New Zealand’s NZX50 share index was close to a one-month low, falling 0.5 percent to 5,794.33 as investors followed Wall Street’s lead after China’s devaluation and turned cautious about stocks.
The index of top-10 stocks led the market lower, down 0.6 percent, with only Fisher and Paykel Healthcare , which gained 1.7 percent, defying the trend.
Casino operator Sky City fell 0.5 percent as it reported a 31 percent rise in net annual profit and said trading at the start of the new year.
The weakness in the dairy sector was reflected in Synlait Milk falling 2.6 percent to a record low of NZ$2.20, while the Fonterra Shareholders Fund was 0.8 percent lower.