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Australia: Shares fall as financials drag

Tuesday, May 2, 2017 - 14:55

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[SYDNEY] Australian shares snapped seven straight sessions of gains to end Tuesday lower as financial stocks fell after Australia and New Zealand banks' quarterly earnings missed expectations.

Meanwhile, Australia's central bank also held rates steady at 1.5 per cent for a ninth straight month on Tuesday as it sought to balance the risk of bursting a debt-fuelled property bubble against subdued inflation and wages growth.

The S&P/ASX 200 index closed 6.123 points, or 0.1 per cent, down at 5,950.4, after seven straight gaining days.

Australia and New Zealand Banking Group fell as much as 3 per cent, logging its worst day in nearly six months, after a 23 per cent rise in first-half cash profit fell short of analysts' expectations.

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Market voices on:

ANZ was the first to report half-year results among the 'Big Four' banks which had rallied in previous sessions on optimism ahead of the results. "ANZ's miss on consensus was disappointing in the background of that rally," said Ric Spooner, chief market strategist at CMC Markets.

The ASX financial index was down over a percent as the other three of the 'Big Four' banks fell between 0.2 per cent and 0.9 per cent.

Investors will now be looking for National Bank of Australia's half-year results due on May 4.

Basic material stocks also fell as BHP Billiton, which has significant oil interests, fell 0.5 per cent, while gold stocks lost momentum as the precious metal hit near three-week lows.

Newcrest Mining shed 0.4 per cent, while Evolution Mining declined 3.5 per cent.

On the other hand, consumer non-cyclicals gained as Woolworth's rose as much as 2.5 per cent after posting strong sales figures for the quarter.

New Zealand's benchmark S&P/NZX 50 index rose for the seventh straight day, up 0.5 per cent, or 40.27 points to 7,422.49.

Industrials and utility stocks gained with Air New Zealand and Port of Tauranga rising 3 per cent, while Meridian Energy climbed as much as nearly 2 per cent, its biggest intraday percentage gain in 4 weeks.

REUTERS

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