Australia: Energy, tech stocks drag down shares on coronavirus impact

[BENGALURU] Australian shares closed lower on Tuesday, led by losses among energy and tech stocks, due to worries over the impact of the coronavirus epidemic on China's economy and its global supply chains.

The S&P/ASX 200 index ended 0.2 per cent lower at 7,113.7. It marks a second session of losses and a soft start to the week as corporate results stream in.

Apple Inc's warning that it will not meet its revenue forecast in the March quarter highlighted the widening impact of the coronavirus and dragged the market lower.

Australia's technology index dropped 1.2 per cent, led by losses from US-based Altium Ltd which had flagged weak outlook partly due to the virus epidemic. It closed down nearly 8 per cent.

Cochlear warned that demand for hearing implants may struggle to catch-up in China if the epidemic does not subside soon and continues to delay surgeries.

The hearing implant maker's shares were down 3.4 per cent as it also reported a flat underlying profit.

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Woodside Petroleum led the losses among energy stocks as oil prices declined due to demand worries put forth by the fears of the spreading virus.

Citigroup, writing on the likelihood of further interest rate cuts, said the central bank has set a higher hurdle for further rate cuts, "but we believe the bank will need to cut again if its optimistic growth forecasts don't materialise".

The U.S. bank sees a 25 basis point cut in May, and said the coronavirus could test the Reserve Bank of Australia's resolve.

BHP Group closed 0.8 per cent higher after it reported its best profit in five years, though slightly off estimates. Rival Rio Tinto also closed higher.

Rio had lowered its iron ore shipment forecast late on Monday due to a tropical cyclone that hit Australia's west coast.

Meanwhile, No 2 grocer Coles Group acknowledged that it underpaid some store managers for six years, crimping its half-year profit. Its shares closed 1 per cent lower.

New Zealand's benchmark S&P/NZX 50 index rose 0.5 per cent to 11,935.84.

A 2.5 per cent gain by Synlait Milk and advances by Fonterra helped prop up the index.

REUTERS