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Bank stocks, wage data push Australia shares down; NZ flat

Wednesday, May 17, 2017 - 12:37

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Weak bank stocks pushed Australian shares down on Wednesday while poor wage growth data and a dip in consumer confidence dampened sentiment.

[BENGALURU] Weak bank stocks pushed Australian shares down on Wednesday while poor wage growth data and a dip in consumer confidence dampened sentiment.

The S&P/ASX 200 index was down one per cent, or 59.718 points to 5790.8, its lowest since March 28, at 0319 GMT. The benchmark rose 0.2 per cent on Tuesday.

Financial stocks accounted for more than half of Wednesday's losses with the ASX 200 Financials (GIC) sinking 1.8 per cent to its lowest in more than three months.

The "Big 4" banks retreated 1.3-1.8 per cent, with National Australia Bank extending losses as it got knocked down to a three-month low after trading ex-dividend on Tuesday.

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Westpac Banking Corp was set to trade ex-dividend on Thursday.

As banks are starting to go ex-dividend, investors are holding on to receive dividends. There are concerns that once dividends are paid there will be pressure in the sector as investors diversify holdings, said Michael McCarthy, chief market strategist at CMC Markets. "It could be selling ahead of the ex-dividend dates of ANZ and Westpac."

Data released on Wednesday showed that Australia's wage growth is stuck at record lows and that consumer confidence index slipped in May, hurt by decreased confidence in property prices and increased worries about family finances following the federal budget.

Wesfarmers dropped over one per cent after the retailer abandoned plans to sell shares in Officeworks stationary division, citing unfavourable market conditions. An initial public offering (IPO) had been expected to raise A$1.5 billion (S$1.55 billion).

A drop in US futures due to rising tensions and concerns around US President Donald Trump also prompted the negative sentiment in the bourse.

Resource stocks were the only part of the Australia market in positive territory, led by gold shares, which rose as the yellow metal hit a two-week high.

Newcrest Mining, which fell the past two sessions, gained as much as 3.4 per cent.

New Zealand's benchmark S&P/NZX 50 index ticked up 0.04 per cent, or 2.88 points to 7410.49.

Health care stocks dominated gains, led by Fisher & Paykel Healthcare Corporation, which surged as much as 4.8 per cent after ResMed dropped a complaint against the medical device-maker at the US International Trade Commission (USITC).

Resmed had asked the trade body to stop Fisher & Paykel Healthcare from importing its sleep masks into the US stating it was an infringement of patented technology.

REUTERS

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