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  • Jan 1st, 2016
  • Comments Off on Australian shares down for a second year
Australian shares ended the year more than 2 percent down, disappointing investors for the second year in a row as slumping iron ore and metal prices hit bluechip mining stocks while onerous capital rules hurt the heavyweight banking sector. The S&P/ASX 200 index slipped 0.5 percent on the last trading day of the year on Thursday to 5,295.9 points, staying near a 2-month high hit in the previous session. The benchmark rose 1 percent in the previous session.

The index has delivered its first annual fall since 2011, having only added a meagre 1 percent in 2014, resulting in almost no net change in the benchmark over the past two years. In contrast to its Australian cousin, New Zealand's benchmark S&P/NZX 50 index has made successive record highs and ended the year up a whopping 13.6 percent, its fourth annual gain.

The New Zealand index rose 0.08 percent or 4.87 points to finish the session at a record close of 6,324.26. Analysts maintain a bullish long-term view of the Australian index on the back of the weak Aussie dollar. The benchmark is expected to rebound in 2016 to 5,625 points, a Reuters poll found. Trading resumes on Monday in Australia. New Zealand stock markets re-open on Tuesday. Australia's Resources and energy stocks weighed on the index, threatening to end a 9-day rally that helped push the benchmark 3 percent higher for December alone.

With slumping iron ore and metal prices hitting heavyweight mining stocks, the index has had a rough year overall, shedding 1.7 percent, and is on track for its first loss since 2011. In contrast, New Zealand's benchmark S&P/NZX 50 index has been making successive record highs. While it barely moved on Thursday, it is still up a whopping 13.6 percent this year, its fourth annual gain. In December alone, it gained more than 3 percent.

Copyright Reuters, 2016


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