Australian shares mark 2-month closing low on Omicron fears

• GDP shrinks 1.9pc q/q vs forecasts of a 2.7pc drop

SYDNEY: Australian shares slipped on Wednesday to a two-month closing low as renewed concerns about the efficacy of COVID-19 vaccines against the Omicron variant overshadowed data showing the local economy performed better than expected in the September quarter.

The S&P/ASX 200 index closed 0.28% at 7,235.9, its weakest level since Oct. 6, after shedding 1% in early trade.

Australian authorities flagged another probable case of the Omicron variant in Sydney, adding to worries fuelled by comments from Moderna’s chief executive officer that vaccines were likely to be less effective against the new variant.

“Few vaccine and therapy chief executives have expressed concerns about the efficacy of vaccines against the Omicron variant and it will take a few weeks for us to know the facts,” said Mathan Somasundaram, chief executive officer at Deep Data Analytics.

Meanwhile, the Australian economy shrank 1.9% in the September quarter, significantly better than the anticipated 2.7% decline by economists.

Supermarket giants Woolworths fell 2.4% and Coles dropped 1.6%, while fruits and vegetables producer Costa Group skidded 4.2% to a 17-month low.

Financials closed 0.05% higher after falling 1% in mid-day trade with Commonwealth Bank of Australia, the country’s largest lender, gaining 0.75%.

Australia and New Zealand Banking Group, the country’s fourth-largest lender, shed as much as 1.4%, hitting its lowest in nine months, after it said a class action proceeding had been filed against it for “unfair” interest charged from credit card customers.

Miners weathered the selling best and rose 0.95% as Chinese iron ore futures extended their rally on the back of recent restocking demand at steel firms and as prices of other metals climbed.

Sector heavyweights BHP Group, Rio Tinto and Fortescue Metals advanced between 1.8% and 2.8%.

New Zealand’s benchmark S&P/NZX 50 index was largely unchanged at 12,724.3.