[BENGALURU] Australian shares fell on Friday, led by financials, on growing concerns about European banks after a report said Deutsche Bank's trading clients have withdrawn excess cash and positions held in the largest German lender.
The bank admitted on Thursday it had an image problem with investors as fresh concerns over its stability pushed its US-listed shares to a record low.
The S&P/ASX 200 index fell 42.95 points or 0.8 per cent to 5,428.3 by 0303 GMT.
"There are concerns about the European banking system overall. The real reason to be concerned here is the Italian situation and the plight of Monte dei Paschi and the Deutsche Bank exposure to it," said Michael McCarthy, chief market strategist with CMC Markets.
"While markets had a bit of panic overnight I suspect that they will stabilise in trading tonight. By the end of today's session we might even see some support for regional banks because they are relatively more attractive than their European counterparts," he added.
National Australia Bank, one of the "big four" Australian banks, fell 1.2 per cent, snapping two sessions of gains, and remained poised for its worst intraday percentage performance since September 13.
Australia and New Zealand Banking shed 0.3 per cent, while the other two fell a percent each.
Weaker iron ore and prices put pressure on mining stocks. Index heavyweight Rio Tinto edged down 1.2 per cent, while BHP Billiton tumbled 0.7 per cent.
Nickel miners Independence Group NL shed 2.6 per cent, while Western Areas, the second biggest loser on the benchmark, slumped 7.1 per cent after nickel prices on the LME tipped into negative territory.
The S&P/ASX 200 Energy (GIC) Index receded 0.7 per cent after oil prices slackened due to profit-taking. Santos and Woodside Petroleum fell 2.6 per cent and 0.9 per cent, respectively.
Entertainment company Southern Cross Media was the biggest percentage loser on the benchmark index. It tumbled as much as 16.6 per cent, its biggest percentage loss in around 7 years, after Nine Entertainment divested its entire stake for A$1.54 per share.
Nine Entertainment was the second-best percentage performer on the index, up 2.3 per cent.
New Zealand was a shade lower, with benchmark S&P/NZX 50 index down 0.05 per cent or 3.67 points to 7,339.7, led by utilities.
Contact Energy and Meridian Energy fell 0.8 per cent each.
Heartland Bank recoiled 2 per cent, leading losses in the financial sector.