SYDNEY/WELLINGTON: Australian shares ended more than 1% lower on Thursday, pressured by heavy losses in miners as iron ore prices tumbled for a third consecutive day, while New Zealand slipped as it entered its deepest economic slump on record.
The benchmark ASX 200 fell 1.2% to close at 5,883.2, while the mining index dropped 2.4%.
Fortescue Metals Group slumped 6.4%, while global miners Rio Tinto and BHP Group fell 3.4% and 1.8%, respectively, as iron ore futures continued to drop on rising supply concerns due to a less than expected pickup in steel demand from China, Australia's largest trading partner.
Shares of buy-now-pay-later firm Afterpay slumped 5.4%, while aerial imagery tech maker Nearmap lost nearly 4.5%.
Across the Tasman sea, New Zealand's benchmark S&P/NZX 50 index reversed course from early gains, slipping 0.3% to finish the session at 11,777.13.
Mercury NZ and Spark New Zealand were the biggest percentage laggards on the benchmark, sliding over 3% and 2%, respectively.
Economists expect New Zealand to bounce back faster than other nations, who are still struggling to contain the coronavirus.
"There are some demand concerns," said James Tao, a market analyst at CommSec, pointing to potentially lower demand for Australia's iron ore.
The coronavirus crisis is leaving considerable damage with New Zealand posting a record 12.2% quarter-on-quarter contraction in the three months to June due to lockdowns, while a surprise fall in Australian unemployment rate laid bare the impact on young job seekers. Overnight, the US Federal Reserve said it would keep interest rates near zero until inflation is on track to overshoot the central bank's 2% target. Tech stocks dropped 3%, tracking a selloff in their US peers.
"There weren't as many positive surprises to come through from the commentary from the US Fed chair or some kind of further stimulus that the central bank can provide," Tao said.
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