Australia shares slip on financials; NZ edges up

[BENGALURU] Australian shares fell as much as 0.6 per cent to their lowest in more than a week on Wednesday, with financials and material stocks pulling down the index.

The S&P/ASX 200 index fell 13.68 points, or 0.2 per cent, to 5,699.9 at 0222 GMT, and was headed for a fifth session of losses in six. The benchmark fell 0.1 per cent on Tuesday.

The "Big Four" banks fell in a range of 0.8 per cent to 1.2 per cent, after ANZ said in a note it sees the Reserve Bank of Australia tightening the cash rate by 50 basis points to two per cent in 2018, reversing the rate cuts of 2016 and taking the real (inflation adjusted) cash rate back to zero.

Banks may be under pressure today as a result of the somewhat higher expectations around rate hikes next year based on the ANZ call, said Chris Weston, an institutional dealer with IG Markets.

"Even though raising the cash rate is good for their (banks') margins in the long term, I think there is still a view that it could impact the psyche of the housing market which is so leveraged at the moment," said Mr Weston.

"Our confidence in looking for rate hikes in 2018 is boosted by the hawkish shift in the RBA's language," ANZ said.

Solid growth in employment was expected to continue, which would support household incomes and thus spending in the period ahead, minutes of the RBA's September meeting showed.

Australia and New Zealand Banking Group reversed two sessions of gains to fall nearly 1.2 per cent, while Commonwealth Bank of Australia and Westpac Banking Corp slipped to their lowest in more than a week.

In the materials sector, mining giant BHP Billiton dropped one per cent to its lowest in four weeks and Rio Tinto fell 1.2 per cent, after Chinese steel futures slipped to their weakest in almost a month, dragging down the price of iron ore.

Big telecom stocks reversed Tuesday's gains with the index falling as much as 1.4 per cent after a 1.2 per cent rise in the previous session. Telstra slipped 1.4 per cent, while TPG Telecom plunged 6.9 per cent.

New Zealand's benchmark S&P/NZX 50 index rose 17.54 points, or 0.2 per cent, to 7,782.07 at 0222 GMT.

Auckland International Airport rose as much as 2.2 per cent, hitting a one-week high, while medical device maker Fisher & Paykel Healthcare Corporation broke a four-session losing streak to gain 1.2 per cent.

REUTERS