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Australia shares end lower as financials, tech drag after US bank collapse

March 13, 2023By Reuters

Australian shares extended losses on Monday, led by financials and tech stocks, as investor focussed on the developments around the collapse of US-based Silicon Valley Bank (SVB).

The S&P/ASX 200 index finished 0.5% lower at 7,108.80, easing off from a more than two-month low hit during the session. The benchmark had shed more than 2% on Friday.

In the global markets, sentiment recovered after US regulators reassured markets that they would protect customer deposits to prevent contagion from the failure of tech startup-focused SVB.

Australian banking stocks slid 1.4% after earlier hitting a five-month low, with the “Big Four” lenders losing between 0.4% and 1.9%.

The country’s prudential regulator said it was seeking more information from Australian banks regarding any impact from the collapse.

SVB’s collapse sparked a global flight to safety, sending gold prices surging and driving a 4% jump in the Australian gold index and limiting losses on the broader index.

Gold producers Regis Resources, Ramelius Resources and Northern Star Resources were the top performers on the benchmark.

Miners closed 1.2% higher on strong iron ore prices, with a 1.5% gain in mining giant BHP group.

Tech stocks fell 1.3%, in line with US peers on Friday amid risks from the SVB’s failure. Several antipodean tech firms have said they did not have material exposure to SVB.

Australian interest rate expectations will be anchored to the domestic economic indicators during the week, Steven Daghlian, an analyst with Commonwealth Bank of Australia said.

“Looking ahead and sentiment in markets and the subsequent price action will most likely be affected by the US CPI print. This is key now the marquee known event risk that could really move markets around,” said Chris Weston, head of research at Pepperstone brokerage.

New Zealand’s benchmark S&P/NZX 50 index closed 0.5% down at 11,672.90.

(Reporting by Savyata Mishra in Bengaluru; Editing by Rashmi Aich)

This article originally appeared on reuters.com

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