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Australia shares slip on U.S. stimulus uncertainty, weak manufacturing data

10/23/2020 | 02:00am

* Gold stocks hit by fall in bullion prices

* Australia's Oct Mfg PMI below estimates - IHS Markit

* NZ marks fifth straight week of gains

Oct 23 (Reuters) - Australian shares slipped on Friday, with gold stocks leading losses, as sentiment was weighed by uncertainty over a U.S. stimulus deal and a preliminary survey showing weaker-than-expected domestic manufacturing activity in October.

The S&P/ASX 200 index closed down 0.1% at 6,167.00. It lost 0.8% in a week riddled with market volatility driven by developments in the U.S. coronavirus relief deal.

With the U.S. Presidential elections less than two weeks away and a stimulus deal still elusive, investor caution was set in after the conclusion of the final debate between President Donald Trump and his Democrat challenger Joe Biden on Thursday.

"Neither side will commit to a deal now this close to the election. If it can be used to gain some leverage by either side, nothing will be agreed upon," said Brad Smoling, managing director at Smoling Stockbroking.

House Speaker Nancy Pelosi on Thursday said negotiators were making progress in talks with the White House for another round of COVID-19 stimulus, but Senate Republicans remained skeptical of a possible deal.

On the domestic front, a preliminary IHS Markit survey showed Australian manufacturing activity in October expanded at a weaker pace than last month, as coronavirus-driven lockdowns in parts of the country continued to hamper economy recovery.

Gold stocks fell 2.5% to its lowest since Oct. 7, as gold prices were hit by a stronger dollar.

De Grey Mining lost about 5%, while Regis Resources closed 4.3% lower.

The mining index lost 1% to close at its lowest since Oct. 7, weighed by BHP Group and Rio Tinto falling about 1% each.

In a bright spot, energy stocks finished 1.2% higher boosted by higher oil prices, with Santos and Woodside Petroleum gaining 3.9% and 1.2%, respectively.

New Zealand's benchmark S&P/NZX 50 index gained 0.5%at 12,470.34. On a weekly basis, the benchmark has gained 0.5%, extending a four-week winning streak.

Meridian Energy advanced 3.8%, while Mercury NZ rose 3.5%.

(Reporting by Nikhil Subba in Bengaluru; Editing by Amy Caren Daniel)

© Reuters 2021
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