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Australia: Market slips 0.2%

Capital Market 

The Australian share market finished session lower in choppy trade on Monday, 22 February 2021, as losses in healthcare and tech stocks countered strong gains in miners driven by buoyant commodity prices. At closing bell, the benchmark S&P/ASX200 declined 12.90 points, or 0.19%, to 6,780.89. The broader All Ordinaries dropped 2.49 points, or 0.04%, to 7,061.55.

Mining stocks rose, with copper miners leading the charge after prices of the base metal hit a more than nine-year high last week. Iron ore prices have defied expectations and returned to record highs of nearly $US170 per tonne as Chinese demand for the steel-making ingredient remained elevated, while copper prices have spiked this month. Iron ore titans BHP Group, Rio Tinto, and Fortescue all gained more than 3%.

The arrival of a COVID-19 vaccine in Australia heralded a flurry of buying activity among travel and leisure stocks. Webjet gained 8.9% and Flight Centre was up 7.2%.

Shares of Ampol fell to a more than four-month low after the fuel supplier said it expected market conditions to remain challenging in 2021, with travel restrictions due to the COVID-19 pandemic likely to continue denting fuel demand.

ECONOMIC NEWS: Fitch Affirms Australia's 'AAA' Rating, Outlook Negative- Fitch Ratings maintained Australia's sovereign ratings at 'AAA' citing strong institutions and effective policy framework.

However, Fitch said the 'negative' outlook on ratings reflects uncertainty around the medium-term debt trajectory following the significant rise in public debt/GDP caused by the response to the pandemic. The economy is estimated to shrink 2.8% in 2020 compared to 'AAA' median contraction of 3.8%. The economy is projected to expand by 3.8% in 2021 and 2.7% in 2022. The effective fiscal and monetary response has helped the economy to withstand the economic shock caused by the pandemic, the agency observed. Due to government's fiscal stimulus measures, the general government deficit is expected to widen to 12.7% of GDP in the fiscal year ending June 2021. The general government deficit is forecast to fall to a still-high 6.4% of GDP in FY22, Fitch said.

CURRENCY NEWS: The Australian dollar reached three-year highs against the US dollar, Euro, and Japanese Yen on Monday. The Australian dollar changed hands at $0.7868 after a jump late last week from around $0.776.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Mon, February 22 2021. 17:02 IST