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Australia shares trim losses on better-than-expected GDP data

Australian shares ended nearly flat on Wednesday, trimming earlier losses after data showed the economy performed better than expected in the June quarter, while declines in heavyweight miners offset gains in gold and energy stocks.

The S&P/ASX 200 index closed 0.1% lower at 7,527.1, recovering from a 1% drop earlier in the session, after data showed that Australia’s second-quarter GDP rose 0.7%, bucking analysts’ worst fears of a negative outcome.

A negative figure, however, in the third quarter looks probable, as by far the bulk of the most recent lockdowns and movement restrictions in Australia took place in this quarter, ING analyst Robert Carnell wrote in a note.

“It doesn’t put the Reserve Bank of Australia (RBA) under any pressure to respond in any direction… very modest reduction in asset purchase pace from September need not be altered.”

Biotech firm Mesoblast was among the top losers on the benchmark for a second straight session, after it posted a bigger annual loss on Tuesday, and said it was still chasing an regulatory approval from the U.S. FDA for its flagship product.

The mining sub-index lost 0.9%, tracking a plunge in iron ore futures on lacklustre demand outlook. Heavyweights BHP Group, Rio Tinto and Fortescue Metals shed between 1.3% and 3.2%.

On the upside, gold stocks added 1.3% with the bullion steady ahead of a key U.S. jobs report, while energy stocks tracked prices higher.

In New Zealand, the benchmark S&P/NZX 50 index extended gains to a fourth session, ending up 0.2% at 13,243.49, its highest close since Jan. 27.

Tough lockdown measures enforced to beat an outbreak of the highly infectious Delta variant of the coronavirus were eased for most of the country, though Auckland will remain in strict level 4 lockdown for another two weeks.

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