Australia: Shares hit 8-week low on weak banks, Wall Street slump

[SYDNEY] Australian shares fell on Thursday as Westpac Banking Corp traded ex-dividend, posting its worst day in nearly eleven months, while a slump in Wall Street due to the worsening White House turmoil added to the gloom.

The S&P/ASX 200 index dropped 1.3 percentage, or 77.2 points to 5,709.8 by 0330 GMT. The benchmark fell to its lowest in 8 weeks at one point in the session. The bourse slipped 1.1 per cent on Wednesday.

All sectors were in the red with bank stocks accounting for more than half of the losses on the benchmark.

The benchmark index of financial stocks sagged to its lowest in over three months and was on track for a third day of losses.

The country's second-biggest lender Westpac dived as much as 4.7 per cent to a 6-month low as it traded ex-dividend.

"Our banks are quite stretched, with the ex-dividend cycle and the effects of the bank tax. A lot of the economy is facing real challenges," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities, referring to a new tax on banks in this month's federal budget. "It's also a follow-on effect of what we're seeing out of US politics," he added.

Wall Street tumbled as concerns mounted over US President Donald Trump's ability to deliver on his tax, banking reforms and infrastructure spending policies, following reports he inerfered with a federal investigation.

Global miner BHP Billiton joined the top losers in the bourse, falling 1.3 per cent, at one point. Activist investor Elliott Management said a meeting with BHP's chief executive this week was 'constructive'. The fund is urging the miner to make strategic changes.

The world's top fibre cement building materials maker James Hardy Industries dropped as much as 5.7 per cent to its lowest in over a month despite reporting positive results.

If the Fed keeps moving rates higher there will be pressure on the US housing cycle and the local housing cycle. So James Hardie will be threatened at these multiples, said Somasundaram.

New Zealand's benchmark S&P/NZX 50 index fell 0.6 per cent or 45.80 points to 7376.70. The index was set for its biggest single-day fall in nearly 6 weeks despite reports of growing consumer confidence in the country in May.

Materials and healthcare stocks led losses with Fletcher Building, down as much as 3.1 per cent among top losers on the benchmark.

REUTERS