[SYDNEY] Australian shares slipped on Wednesday with weaker iron ore, copper and oil prices dragging down Australia's heavyweight resources sector amid concerns about global demand.
The S&P/ASX 200 index fell 29.9 points to 5,490 by 01:20 GMT, pulling away from a two-month peak set on Monday.
Energy and basic materials suffered the most with 1 percent losses, while miners added to the pain. Spot iron ore prices dropped to their weakest level since 2009 on Tuesday as a supply glut keeps pressure on the commodity, which has fallen 42 per cent this year. Bluechips BHP Billiton and Rio Tinto gave up around 1 per cent, while BC Iron tumbled nearly 7 per cent to hit five-year lows at $0.900.
Financial sector stocks also weighed, even though Commonwealth Bank of Australia (CBA) posted a near 10 per cent rise in first-quarter cash profits.
Three of Australia's major four banks, including CBA, have posted record profits in the recently-ended financial year although their results highlight future challenges in maintaining earnings momentum. "Even CBA's strong result where we saw a 14 percent jump in first quarter earnings to A$2.3 billion did little to influence the downtrend," said Tristan K'Nell, head of trading at Quay Equities, seeing falling crude oil and iron ore as a major reason for the decline.
CBA shares shed 0.2 per cent to US$80.62, having touched a two-month peak of US$81.10 Tuesday. National Australia Bank dropped nearly 1 per cent.
Transfield Services Ltd, which runs the Australia's offshore refugee detention centres, had better luck after it upgraded earnings forecasts. It rose 1.8 per cent after it said it may still reach a buyout agreement with Spain's Ferrovial SA .
Shares of building materials maker CSR rose 1.4 per cent, helped by the company reporting a 15 per cent rise in its half-year revenues.
Next flash point is HSBC China Services PMI data due out later in the session. Australia is sensitive to news out of China, the nation's top export market.